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ANALYSIS

igeria is no Indonesia, but the world’s fourth most populous country does have a lesson for Africa’s most populous nation on how to diversify its economy, boost growth rates and reduce poverty. Even with a much higher population than Nigeria, Indonesia has been able to attain lower poverty rates which declined to the lowest level ever Continues on page 38

Inside NJC queries Onnoghen, acting CJN Mohammad, refers CCT boss Umar P. 39

-0.52 12.37

-0.01 14.45

0.00

10 Y 0.04

20 Y 0.00

14.96

15.35

15.09

NGUS JUN 26 2019 365.34

NGUS DEC 24 2019 366.24

g L-R: Aliko Dangote, president/ chief executive, Dangote Industries Limited; Ali Balarabe, chairman, Ali Balarabe & Sons and national best performing customer, Dangote Foods; Halima Aliko Dangote, executive director, commercial, Dangote Flour Mills plc; Yemisi Ayeni, chairperson, NASCON Allied Industries plc, and Olakunle Alake, group managing director, Dangote Industries Limited, at the Dangote Foods Gala Nite in Lagos.

As the 2019 elections approach, BusinessDay brings you ‘19 for 2019’, where 19 experts tackle issues that will shape Nigeria for the next generation. Today, Olu Fasan writes on ‘Reforming Nigeria’s federalism: The political and economic imperatives’. See Page 2

ENDURANCE OKAFOR & DIPO OLADEHINDE

NGUS MAR 27 2019 364.89

19 Experts on 2019

What Indonesia can teach Nigeria about industry, growth and reforms

FGN BONDS

TREASURY BILLS

4 years after, Buhari fails to curb corruption T CALEB OJEWALE he anti-corruption crusade of the incumbent administration appears to be failing, leaving Nigeria stuck in the repressive throes of corruption and its resulting effects that deter economic prosperity. In less than a month, two data-

As FCT leads in corruption cases N400bn bribes paid to public officials annually – UNODC

driven reports, including one by Nigeria’s Bureau of Statistics (NBS), have posted a simple finding: corruption continues to

thrive under the government of President Muhammadu Buhari. The NBS report tried to downplay the magnitude of corrup-

tion taking place under Buhari’s watch, but try as it did, the bits of information contained in the Continues on page 38

2 BUSINESS DAY NEWS

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Wednesday 30 January 2019

Reforming Nigeria’s federalism: The political and economic imperatives

OLU FASAN L-R: Stephen Jennings, CEO, Rendevour; Kamorudeen Ishola Animashaun, paramount ruler of Epe; Rafiu Adewale, Olu of Epe; Audu Ogbe, minister of agriculture and rural development; Akinwunmi Ambode, governor, Lagos State, and Frank Mosier, chairman, Rendevour, at the unveiling of Alaro City in the Lekki Free Zone, Lagos yesterday. Pic by Pius Okeosisi

Rising use of hard drugs heightens risks of living in Nigeria’s major cities

… NBS classifies 376,000 out of 14.3m using psychoactive substances as ‘high-risk’ ... Drug use highest in Lagos, Kano, Oyo, Rivers, Delta, Imo

IHEANYI NWACHUKWU

igeria Drug Law E n f o rc e m e nt Agency (NDLEA) may need to up its game following the disclosure of an alarming number of people consuming hard drugs in Africa’s largest economy. Currently, out of 14.3 million Nigerians using any form of drugs, 376,000 are said to be ‘high risk drug users’. No fewer than 80,000 Nigerians inject drugs. Those who take cannabis are 10.640 million, while 4.610 million take opioids (tramadol, codeine, morphine). Whereas 87,000 Nigerians consume heroin, those who take cocaine are no fewer than 92,000. In addition, 481,000 Nigerians take tranquilisers/sedatives, 238,000 take amphetamines, and so on. These, among others, were revealed in the first comprehensive nationwide national drug use survey titled

‘Drug Use in Nigeria – 2018’. The report, which was officially launched on Tuesday, was a product of a survey conducted by the National Survey on Drug Use and Health and the National Bureau of Statistics (NBS) as well as the Centre for Research and Information on Substance Abuse (CRISA), with technical support from the United Nations Office on Drugs and Crime (UNODC). The use of drugs is higher in Lagos, Kano, Oyo, Rivers, Delta and Imo States. The states where it was more difficult to access treatment for drug use disorders are Yobe, Imo, Bayelsa, Rivers and Lagos. In the North Central zone, 236,000 people use drugs in Benue, Kogi (212,000), Kwara (213,000), Nasarawa (152,000), Niger (330,000), Plateau (240,000), and FCT Abuja (180,000). In the North East zone, 370,000 people use drugs in Adamawa, Bauchi (530,000),

Borno (350,000), Gombe (350,000), Taraba (213,000), and Yobe (300,000). Looking at the North West zone,anestimated211,000people use drugs in Jigawa, Kaduna (462,000), Kano (1.070 million), Katsina (481,000), Kebbi (286,000), Sokoto (230,000), and Zamfara (312,000). In the South East zone, an estimated216,000peopleusedrugs in Abia, Anambra (317,000), Ebonyi (188,000), Enugu (370,000), and Imo (500,000). In the South West zone, 200,000 people are estimated to be using drugs in Ekiti, Lagos (2.117 million), Ogun (440,000), Ondo(401,000),Osun(336,000), and Oyo (930,000). In the South-South zone, it is estimated that 352,000 people in Akwa Ibom use drugs. In Bayelsa, they are 163,000, Cross River (222,000), Delta (513,000), Edo (330,000), and Rivers (580,000).

•Continues online at www.businessday.ng

Foreign investors pick Egypt reforms over Nigeria chaos SEGUN ADAMS

oreign inflows into Egyptian Treasury bills have narrowed the yield gap with Nigerian assets to below a percentage point for the first time in almost a year, according to data from the Bloomberg Terminal. Nigerian assets missed out on a rally this year because of political chaos ahead of general elections next month. The yield on Egypt’s 12-month Treasury bill fell to 18.4 percent Tuesday, from almost 20 percent at the start of the year, while the yield on Nigeria’s security climbed 13 basis points this

year to 17.5 percent Monday. Traders are also happier with Egypt’s currency system, analysts say. Markets see the Egyptian central bank’s decision late last year to end a repatriation mechanism guaranteeing foreign-exchange availability for overseas investors as a signal authorities are moving closer to a free float. Nigeria, by contrast, has inexplicably pegged the naira to the dollar at N306/$ since mid-2017, which investors fear could lead to it becoming overvalued and it raises the risk of a dollar shortage should oil prices drop significantly. Egypt “has a reform story”,

said Parth Kikani, a director of fixed income at the Dubaibased Emirates NBD Asset Management, which has been overweight in Egypt in the past two years by investing in its Treasury bills. “We see a lot of positives in the economy,” Kikani said, adding that he sees Moody’s Investors Service and Fitch Ratings following S&P Global Ratings in upgrading the nation’s debt ratings. The Egyptian pound advanced the most in almost two years Monday as fund flows into the local Treasury bills market accelerated amid improving appetite for developing-nation assets.

Visiting Fellow at The London School of Economics. He specialises in international trade and business law

igeria faces a critical choice after this year’s general election: it must restructure its polity or suffer an existential decline. Last year, the London School of Economics and Oxford University said in a joint report that a state is fragile if it exhibits the following “symptoms of fragility”: security threat from organised non-state violence; the government lacks legitimacy in the eyes of citizens; the state has weak capacity for essential functions; the environment for private investment is unattractive; the economy is exposed to shocks with little resilience; and deep divisions in the society. Certainly, these symptoms apply to Nigeria, which makes it, according to the LSE-Oxford framework, a fragile state. But here’s the question: why is Nigeria, a well-endowed country, with huge human and natural resources, stuck in the fragility trap? Some blame leadership, and that’s somehow right. Leadership matters. However, most successful nations do not put their faith in individual leaders; they build suitable and robust institutions. This is because the right constitutional and governance structures can constrain the behaviours of individuals, including leaders, and thus condition good political and economic governance. So, the nature a country’s politicogovernance structures matter. Which brings me to the nature of Nigeria’s federalism. Nigeria

Streamlining the federal government and reducing the current 36 states to between 8 and 12 regions should be key elements of restructuring the country. faces two critical problems that deprive it of economic and social progress. One is the lack of unity; the other is the absence of good governance. But these problems are largely linked to flaws to Nigeria’s federal system, its incompatibility with the political and economic principles of true federalism. According to the Encyclo-

paedia Britannica, a truly federal system must have the following characteristics: non-centralisation, local autonomy and elements that promote common nationality. Nigeria’s federalism fails all these tests. First, it is overcentralised. Rather than devolve powers to the subnational units, it concentrates them at the centre. The Tenth Amendment of the US Constitution provides that all powers not delegated to the federal government are reserved to the states. Given that the federal government’s powers are specified and limited, the states can do virtually everything else. By contrast, the Nigerian Constitution provides for an Exclusive Legislative List and a Concurrent Legislative List, which give the federal government the power to do virtually everything. The effect of the excessive centralisation is that the state and local governments lack the ability to become substantially autonomous and self-sustaining. That’s not true federalism. But Nigeria’s federalism also fails to engender a sense of common nationality. Nothing binds together the country’s strongly divergent ethnic nationalities. The Encyclopaedia Britannica says that, in a true federal system, no part of the federation should be “so dominant that others have little opportunity to provide national leadership or even a reasonably strong alternative to the policy of the centre”. But Nigeria’s federalism doesn’t

Nigeria’s federalism also fails to engender a sense of common nationality guarantee equal opportunities and fair material treatment. For instance, the Igbo have not produced a president since Nigeria returned to civil rule in 1999, yet their chances of doing so in 2023 are still subject to Nigeria’s dominant power politics. Nothing undermines a federal system more than a lack of balance among the constituent polities. Indeed, the constant use of force, such as the so-called “operation python dance”, to maintain domestic order is a strong evidence that Nigeria’s federalism is flawed. The use of repression to maintain unity is usually associated with centralised nations, not truly federal states. Where there is a mismatch between power (at the centre) and identities (at subnational levels), compliance with authority is often not voluntary, thus frequently requiring the use of force. Only true federalism can address that problem. So much for the politics of federalism, what about its economics? The former is concerned with unity, the latter with good governance. Central to the economics of federalism is economic efficiency, namely, which level of government is best suited to manage governmental functions efficiently.

Why is Nigeria, a well-endowed country, with huge human and natural resources, stuck in the fragility trap? According to the Tiebout model of decentralisation, developed by the economist Charles Tiebout, public activities should be decentralised unless where there are possibilities of significant inter-jurisdictional externalities or spill-overs. This is similar to the ideas behind fiscal federalism, a concept developed by another economist Richard Musgrave, who argued that the federal government should be responsible for economic stabilisation and income redistribution while state and local governments should have significant responsibilities and resources as they are closer to the people and best able to meet their needs. Of course, Nigeria’s federalism fails the economic efficiency test. The federal government does much of what the subnational units should be doing, including policing, and controls huge resources, taking, for instance, nearly 50% of the nation’s revenues. What’s more, Nigeria is overgoverned. The federal government has 821 agencies and the state and local government have thousands of them. True federalism would reduce the cost of governance through consolidation of administrative structures, including reduction of unnecessary duplications between federal and state governments and, indeed, between states within the same geopolitical zone. Streamlining the federal government and reducing the current 36 states to between 8 and 12 regions should be key elements of restructuring the country. Finally, Nigeria would benefit from competitive federalism. In the 1960s, yardstick competition between the regions promoted policy and productive innovation. Today, there are no incentives for such competition and policy innovation as the states are over-dependent on the federal government. Yet, Nigeria can only be as economically vibrant and dynamic as its constituent parts. There are strong political and economic imperatives for reforming Nigeria’s federalism. The future of this country depends on it. True federalism will yield benefits for Nigeria, but the status quo will endanger its political stability and condemn it to economic and social stagnation. Nigeria is certainly at a crossroads. The challenge for the politicians after this year’s elections is whether they would save this country by restructuring it or allow it to remain stuck in the fragility and poverty traps. • On Friday Ayisha Osori, international development consultant, journalist and politician, takes on the thorny issue of governance in Nigeria.

Wednesday 30 January 2019

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Wednesday 30 January 2019

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Wednesday 30 January 2019

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Wednesday 30 January 2019

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Preserving Socio-economic welfare during political transition Small Business handbook

Emeka Osuji

his is Nigeria’s political transition season, when the citizens have a chance to elect new governments, or extend the mandates of the existing ones, both at the national and subnational levels. It comes every four years, and during that period, so many things, good and bad, happen together. The costs and consequences of this transition are so heavy in financial, social and economic terms that some people have suggested that four years is too short for us to repeat such heavy financial and socio-economic costsimplied by the elections. One of the things that happen during elections times in Nigeria is that everybody acquires a new career in politics, either as a contestant, critic, cheer leader or analyst. But among all of these, the analysts seem to be the most passionate and committed to their role. They are at work everywhere and every time. From the poverty-stricken beer parlours in Orile-Iganmu to the lush wine bars and lounges in Lekki Phase 1, men and women, old and young, hungry and well-fed, jobless and extremely busy; even with or without voters’ cards, engage one another in fierce

debates in an effort to promote one candidate or the other. In fact, some of these debates in bars and beer parlours raise more critical issues and answer more important questions than many of the national election debates that feature the real candidates for election. How valuable it would be to garner and synthesize the views of these freelance political analysts. At this time also, tension and passion rise, desperation increases and unverified facts comingle with lies, which flow uncontrollably. In some cases, fights break out between supporters of candidates who, sadly, may never ever come in physical contact with the candidates they fight to promote. That is how much Nigerians love politics, and how far they are prepared to go to defend their positions; just as the real candidates do fierce battles in what many of them have called a do or die battle to win elections. It is indeed, becoming a truism in Nigeria that once politics enters, every other thing, including common sense, takes a bow and leaves. And so do many things that improve the standard of living of the people – real productive work. How do we ensure that vital economicactivities is not stalled? One of the overriding objectives of every well-meaning government is to provide its people with a high standard of living. This objective, among many others, such as peace, and the security of lives and property, drive the actions of every such government. The Nigerian government has been focused on these objectives over the years, despite occasional slips that tend to cast doubts on its commitment to the overall good of

the people. It is however the duty of government to take steps to ensure that its actions not only promote but are seen to truly promote the welfare of its people at all times, including times of political transition. It is very easy to be distracted from this function, when elections are at hand, hence the need for this comment. The public good is the main essence of political transition and the welfare of citizens should not be compromised on the altar of politics. Coming at a time when the effects of the last recession are still evident on the streets of Nigeria, and more than half of its over 190 million citizens live in abject poverty, the 2019 general elections have the potentials for throwing the country back into recession, if not properly managed. Indeed, it could have wider implications than the political outcomes easily imagined. Not only have economic activities slowed on account of the elections, and hence decreased the rate of financial flows to families, the uncertainties surrounding all categories of investment have increased. Although foreign investment, especially portfolio investments, has been flippy floppy; and not exactly reflecting its usual behaviour at election time, the overall impact on foreign investment is still likely to be substantially negative, especially in view of the tension being generated by certain actions of the authorities as elections approach. We must therefore, protect our national social welfare by ensuring that nonpolitical institutions and agencies continue to be so and discharge their duties in nonpartisan ways. Among the key challenges facing developing countries, and in particu-

‘

We must therefore, protect our national social welfare by ensuring that nonpolitical institutions and agencies continue to be so and discharge their duties in nonpartisan ways

lar, those in the Sub-Saharan Africa region, are unemployment, inequality, ignorance and disease. These are major sign posts of leadership failure. They entail the powerlessness and deprivation. They vitiate the value of citizenship and unravel its benefits. But these can be tackled if we recognize the clearly established link between poverty and the extent to which people have access to finance and financial services– financial inclusion. Excluded people have no story to tell about the national economy. This is why governments all over the world are bent on increasing people’s access to finance. Nigeria has recently revised its financial inclusion programme with a target of 80 per cent inclusion by 2020. We should continue to implement this strategy despite the need to concentrate and win elections. Economic welfare reversals are usually hard to reverse. We are experiencing slow growth around the world and this will likely continue in 2019 with telling consequences on our economies. Africa’s natural resource exporters, like oil rich Nigeria, will continue to require strong economic leadership to effectively manage their dwindling revenues. We still have a history of growth that is not evenly shared over the foreseeable period. One of the reasons for the evident inequity in the distribution of the benefits of growth in Nigeria is that many of our people operate outside the loop of the financial flows while most of the benefits of growth pass through financial institutional channels. Dr Emeka Osuji, School of Management and Social Sciences, Pan Atlantic University Lagos. eosuji@pau.edu.ng @Emyosuji

Transforming multi-stakeholder partnerships from philosophy to reality MAGESVARAN SURANJAN

s the world’s population continues to grow, we observe stark increases in the disparity between the privileged and underprivileged in terms of access to basic needs, like education and hygiene. Serving millions of P&G’s consumers across Asia Pacific (APAC) and India, Middle East and Africa (IMEA) as I do, in my opinion, the inequalities in these two dynamic regions are only widening. We all have a stake and we all can make a difference: providing access to basic human needs to everyone and safeguarding the environment for future generations is the top priority for governments, industry, NGOs, and consumers. We know that none of these stakeholders can solve these issues by themselves and that multi-stakeholder partnerships (MSPs) are critical to achieving the United Nations Sustainable Development Goals (UNSDGs). However, the effectiveness of multistakeholder partnerships is average at best, and even less so in the long term. In my opinion, this is because of two key reasons. One of which is, unrealistic expectations where multi-stakeholder partnerships are expected to take the place of government programs instead of supporting them. Countless studies reveal discrepancies existing between activity outputs and previously stated goals and ambitions. The second is the unclear mapping of roles. Thisresults in the

inaccurate matching of industry, government or NGOs to tasks. This is tantamount to a square peg in a round hole; a futile exercise. This results in stakeholders being left to find solutions beyond their areas of proficiency, creating chronic inefficiency. Despite this, there is a silver lining. I strongly believe that we can all be a force for good if we make MSPs more practical. My three recommendations to achieving this are: Firstly, having a common vision with unique actions: Our puberty education program, run in conjunction with government schools and NGOs in Morocco, Jordan and India and called Always Keeping Girls in School in South Africa, Nigeria, Kenya represents a strong example of an effective partnership program in action. The common vision is to reduce the rates of girls dropping out of secondary school due to menstruation. This is because of lack of access to sanitary pads, puberty education, and affordability of pads. We provide the puberty education and pads; the governments and NGOs provide access via government schools and community networks to reach girls across the region. Every year we educate over 17.5 million girls across the world on menstrual hygiene management (MHM) with 33 partners in over 45 countries. We have been doing so successfully for over 10 years, slowly but surely reducing the drop-out rates of adolescent girls from school. Similarly, in partnership with the Philippines trade department, we launched a program for the growth and development of Small and Medium Enterprises (SMEs) with the common vision to help typhoon victims start small “convenience stores” to improve their livelihood. We provided access to our

portfolio of brands, as well as retail training to set the SMEs up for long-term success. The trade ministry and local government helped in the identification and vetting of beneficiaries, and the day-to-day running of the program. Secondly, monitor to assess and improve. Another example of a successful publicprivate-partnership is GAVI – a multi-stakeholder alliance between the World Health Organization (WHO), UNICEF, the World Bank, the Gates Foundation, health institutes and an array of civil-society and government organizations. GAVI exemplifies a wellimplemented initiative facilitating vaccine provision and development, country level immunization programs, and strengthening health systems, with special focus on lowincome countries. The success of this MSP stems from its robust monitoring, evaluation framework, and strategy that is conducive to active stakeholder participation. Importantly, this monitoring program helps create the conditions for continuous improvement. Between 2000 and 2017, GAVI’s successful partner engagements have contributed to the routine vaccination of around 690 million children, as well as 760 million people receiving immunization through vaccination campaigns. Lastly, we need to leverage innovation, as it is the industry’s strength. A novel example of a multi-stakeholder partnership that leverages innovation in a unique way is the Singapore Government’s “National Steps Challenge”. This in my opinion has been effectively executed by the Health Promotion Board under Singapore’s Ministry of Health. The intent of the “Steps Challenge” is to curb the reported rise in the cases of obesity and diabetes in

Singapore by encouraging the populace to be much more active. How? Through a simple solution; providing all citizens and permanent residents with wearable fitness monitors. To activate action, they provided an incentive; Rewards for Steps, by partnering with a variety of Singapore retailers and businesses. This program leverages the innovation in fitness monitoring partnering with Fitbit, Garmin, Google Fit, and Strava and the existing consumer usage of mobile apps. The results have been very encouraging with a reported 30,000 of 696,000 participants effectively getting into the habit of clocking over 5 kilometers of exercise everyday for 6 months. Another example is the recently announced Absorbent Hygiene Products Recycling facility in India leveraging a breakthrough technology developed in Italy by Fater, a joint venture of P&G with the Angelini Group. This innovation will upcycle sanitary napkins and diaper waste. In partnership with the municipality and NGOs who will collect the waste that consumers will segregate, we will create the model that will bring this to life in India. These three recommendations will ensure that MSPs are the Force for Good and Force for Growth they are meant to be. With unique responsibility, accountability and action, transformation can be created and sustained to proffer real, positive impact. In my opinion, this is the proven way to ensure that MSPs are not simply a “philosophy” but a reality with concrete and sustainable outcomes. Suranjan is President, P&G APAC and President, P&G IMEA

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Don’t get used to it Character Matters with Daps

Dapo Akande

ven at the risk of exposing myself somewhat, I will put pride aside and tell this story. I believe some of you may have at some time in your lives found yourselves in that place where to find two naira notes to rub together was almost like asking the impossible. That dire very financial state where the most basic of needs gradually become a luxury. Unfortunately, like most human conditions, stay long enough in it

and it quickly becomes the norm. You become accustomed to it. I once found myself in such a situation where little things in the house had fallen into varying degrees of disrepair, urgently needing replacement; but because there were many major things that also required my attention and were just beyond my reach financially, these little things just seemed inconsequential. Some of such little things were the light bulbs that had blown. Anybody who has known me for some time would attest that I’m a stickler for everything working as it should. Not this time. I became accustomed to having my evening shower with the bathroom door slightly ajar. I had to, so the bedroom light could afford me some visibility as the bathroom bulb had blown since! By the time I eventually changed it, the next time I wanted to use the bathroom I hesitated to switch it on. “Will people passing outside not see me through the flimsy bath-

room curtains?” I thought. I quickly checked myself by asking rhetorically, “did I not used to switch the light on before? Why am I thinking like an illiterate?” I’ve discovered that one can surprisingly quickly become accustomed to substandard things and once you do, your whole thinking changes. Many of us have become accustomed to substandard behaviour; bad character traits that have crept into our society over time. Let’s not pass this down to our children. Let us teach them why treating others with respect and consideration (Manners) will ultimately benefit them and the society they live in; why it’s good to do the honest thing even when no-one is watching (Integrity); the benefits of showing love to others without expecting anything in return (Neighbourly love); why it’s important they do the right thing always (Discipline) and last but not least, what true prosperity means (Success). True Success

‘

Many of us have become accustomed to substandard behaviour; bad character traits that have crept into our society over time. Let’s not pass this down to our children. Let us teach them why treating others with respect and consideration

can be better termed as Good Success. Permit me to break this down a little. Each of us represents just one small jigsaw piece in the big jigsaw puzzle called life. Good Success is inextricably linked to us correctly fitting into the right slot in this big puzzle which of course is much bigger than any of us. “Success” of which you are the sole beneficiary is not the same as Good Success, just as a jigsaw piece that remains on its own doesn’t fulfill its purpose. The values and ideals mentioned above; Manners, Integrity, Neighbourly love, Discipline and a more common good approach to Success, spell M.I.N.D.S. and incidentally, societal change can only begin from the mind. So I challenge you, let’s start it now. Changing the nation...one mind at a time. Akande is a graduate of the University of Surrey, UK, author of the acclaimed book: “The last fight: A personal journey to discovering values.” Contact: dapsakande25@gmail.com

Sustainable Development Goals: Is Nigeria on the right track?

Joseph Nnanna

n 2015 as part of resolution 70/1, the United Nations general assembly agreed by 2030 to transform the world by achieving 17 sustainable development goals. The goals in question range from ending poverty globally to sourcing partnerships for the goals. The table below provides a descriptive view of all 17 goals. In this article I will make a concerted effort to provide some insights on SDG’s 1 & 4 respectively. Indeed, improving the quality of education received in Nigeria and of course sustaining it is no doubt the ticket out of poverty. As we all know, over the last two decades we have gradually witnessed a deterioration in the quality of education our pupils in primary and secondary school receive. And at the tertiary level, the consistency in strikes have only aided in reducing the quality of education of our future leaders. Although axiomatic, it is noteworthy to state that there is a direct correlation with countries that invest in quality education for an extended period of time and maintain momentum, outperform countries that do not. In October of 2018, the World Bank ranked Nigeria 152 out of 157 on its maiden Human Capital Index. In other words, the average Nigerian born today will be less productive when he/she grows up than he/she could actually be if he/she was opportune to complete education while maintaining decent health. The National Policy on Education (NPE) in Nigeria is the guideline for the prudent management and implementation of education in the various tiers of government. Not to be exhaustive, the latest reforms in the sector included innovations such as: 1. Open and Distance learning programs 2. The expansion and renovation of the national mathematical center 3. Information and communication technology were introduced into school curriculums 4. Effective implementation of the Universal Basic Education (UBE) Although the for going represents important steps in reform and perhaps innovation, the sector in this economist view needs to be overhauled. For

instance, on average public schools are often overcrowded with student/teacher ratio exceedingly high. Textbooks, and curriculum for instruction are often outdated and less emphasis has been placed on relevant disciplines of the future. Let’s take a deep dive into the numbers. For years, Nigeria has not maintained adequate funding for education. Zeroing in on Federal government budgetary allocation as a percentage of the total budget to the education sector between (1995 – 1999 was 13%) between (2000 – 2004 was 5.5%), (2005 – 2009 was 9%), (2010 – 2014 was 7.5%) and (2015 till date 8%) although in 2018 federal funding was about 7%. As a benchmark, the countries that make up what is known as the E9 countries, a group of nine countries set out to meet UNESCO’s education for all initiative (Bangladesh, Brazil, China, Egypt, India, Indonesia, Mexico, Nigeria and Pakistan) for the exception of Nigeria allocates more than 20 per cent of its annual budget to education. Looking within the continent amongst sub-Saharan African countries, Nigeria for the most part still trails behind peer countries in the area of funding the education sector. According to the World Bank indicators, amongst African countries allocation to education as a percentage of Gross National Product (GNP), Ghana ranks 1st with 31% allocated to education while Ivory Coast ranks a close 2nd at 30%. In the same ranking, Nigeria comes in 20th at 8.4%. With a growing population, rising public debt profile more than ever before we are beginning to see a gradual decline of Nigeria in key indices which in my view has a human face. The time is ripe for Nigerians to ask more of our leaders, especially in the fight for investing in quality education which will no doubt decrease poverty throughout the country. Consider this bleak trend line, the World Bank forecasts by 2030 90% of the world’s poor will be living predominantly in Nigeria. Incidentally, this is the same year the United Nations aims to achieve the 17 SDG’s. Indeed, there is a common theme globally that education is slow to change. However, there is no shortage of innovative ideas in the sector. For instance, in Brazil school children are currently designing video games to teach each other practical biology. Closer to home in South Africa, secondary school students are testing out career paths as project managers and engineers. This path has created awareness in companies and universities to provide grants/scholarships to fund deserving students. Much closer in the West African region is Ghana. Here we see students receiving training in self-awareness and resilience as they complete their typical lessons for the day.

While innovations in education are taking place around the globe, they are not all created equal— different ideas will lead to different outcomes. So, the question I pose is rather straight forward. How should education policymakers evaluate what is the most valuable? My response equally is straightforward, the worthiest innovation in education are those that ultimately speed up progress and permits all students to acquire the full set of skills and competencies needed to thrive today and for years to come. On that note, perhaps we need to consider leapfrogging in the education sector. Leapfrogging in education simply means to accelerate faster and perhaps in a non-linear pace. The term is typically used in the banking industry. Take Kenya for instance, the swift move to mobile banking (M-PESA) has dramatically reduced the financial excluded members of society in a very short period of time. In fact, in some areas, banking in Kenya at least the mobile banking and funds transfers are faster and more convenient than in advanced countries like the United States. This, in this economist view was a leap forward from the traditional method used. In the education sector particularly in Nigeria, to achieve such progress it would take a dramatic shift in the mindset of policymakers and their ability to coral a critical mass of likeminded reformers. In Nigeria like most of the world, mass education systems have been developed in a step by step fashion. For clarity, the first step would be to provide access, then academic achievement also known as quality, and last but certainly not the least, we have relevance. How relevant is the information being covered? And how can it be used in the future. It is my contention that education policymakers must address all three simultaneously. Presently there are droves of school aged children roaming the streets of communities all over the country. What about children in remote areas without access to road networks etc. The focus should be on how to help them develop the full breadth of competencies and skills they will need to thrive today. A novel example we can consider is that of Brazil. In rural Brazil, leaders in the education sector serving children in the Amazon jungle were able to deliver lessons via a two way video link with trained specialist delivering lessons from the capital city. More importantly the curriculum was designed specifically to cater to their unique context, culture, and need. For continuity in learning, they devised a mentor coaching relationship in their community. Where do we go from here? From the context of innovation, teaching and learning experience must be transformed to be increasingly student-

centered. Second, the process of recognizing student learning—whether that is through national exams or classroom grades—must follow suit and be increasingly individualized. The diagram below provides some clarity on the model. From the perspective of structural change, perhaps more emphasis should be placed on creating an atmosphere that promotes learning for the students. In other words, updated teaching tools, reading/writing materials, desks, chairs, computers for faculty as well as computer labs for all students to enhance learning. In conclusion, a focus on quality education and ending poverty is simply not just the sole responsibility of the federal government. The choice in topic cuts across society as a whole. The States and Local Governments have their role to play as well as you an I. In the final analysis, making headway in achieving the various SDGs will no doubt take a lot of work! In contemporary times, we have witnessed government after another starting projects, abandoning them, only for the next government to start a totally separate project. As a result of this exercise, you can take a tour of the country and see numerous structures that have been abandoned for years. To be sure, repetition builds character and this economist is of the view that it is time to ask more of our leaders and policymakers alike. Because the type of character we are building as a country sheds all citizens in a not so favorable light globally. Indeed this administration has made novel strides to continue and even complete some of the projects of the last administration, however, if the current debate is on issues surrounding raising and sustaining a gradual increase in the minimum wage which is so important in reducing poverty, perhaps we as the citizenry could also ask for a much higher budget in education, and make it the responsibilities of the states to implement the various strategic objectives in each state keeping in mind that every state is unique and as such, a one size fits all approach will not achieve the desired results. Finally, financial institutions such as deposit money banks, and development finance institutions should do more to champion private funding for education to complement efforts of deserving schools. Whether we call it part of corporate social responsibility or perhaps education grants and scholarships or even an “adopt a school” strategy. In the end, we are all in this journey of ending poverty and providing quality education together because a rising tide, lifts all boats. Prof. Nnanna is Chief Economist, The Development Bank of Nigeria,

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Wednesday 30 January 2019

Exclusive Nigerian indicators for ease of doing business?

hat merit attends the call for Nigerian exceptionalism in the World Bank’s Ease of Doing Business Rankings? What research or science informs the call? How does one grapple with it? Or is it merely asking for lower standards for Nigeria from the rest of the world? The call by the Lagos Chamber of Commerce and Industry (LCCI) for country-specific indicators in the global Ease of Doing Business Rankings of the World Bank compels a review of the rankings and the Nigerian situation. It raises many more questions including the rubrics of the envisaged Nigeriaspecific rankings. LCCI Director-General Muda Yusuf on January 21, according to reports quoting the News Agency of Nigeria, called for indicators that reflect the Nigerian condition in the global Ease of Doing Business Rankings. Yusuf stated, “Some of the indicators in the Ease of Doing Business composition do not properly capture the critical variables in our environment. Issues of power, transportation, security and our regulatory environment are not captured. We need to address these other variables that are not on the list of the ease of doing business parameters.” The LCCI boss added: “If you look at the present indicators, it is about construction permits, ease of starting business, credit, reforms,

trading across borders, amongst others. In many of those countries that you roll out these parameters, security is not an issue, power and transportation are taken for granted, whereas in our environment, these are very big issues.” The World Bank gathers data and publishes the annual Ease of Doing Business Rankings. There is also a subnational report focused on individual countries. The Nigerian subnational ranking is now in its fourth year. The Ease of Doing Business Index emanated from research led by Simeon Diankov at the World Bank. Academic research conducted with professors Oliver Hart and Andrei Shleifer was the basis. It looks at ten indicators and assigns values to them to show the complexity or simplicity of regulations and how they enable or disenable business performance. “Higher rankings (a low numerical value indicates better, usually simpler, regulations for businesses and stronger protections of property rights”. The Ease of Doing Business project commenced in November 2011. The ten sub-indices for ranking nations (and states in the subnational) include the following: 1. Starting a business – Procedures, time, cost and minimum capital to open a new business; 2. Dealing with construction permits – Procedures, time and cost to build a warehouse; 3. Getting electricity – procedures, time and cost required for a business to obtain a permanent

electricity connection for a newly constructed warehouse 4. Registering property – Procedures, time and cost to register commercial real estate 5. Getting credit – Strength of legal rights index, depth of credit information index 6. Protecting investors – Indices on the extent of disclosure, the extent of director liability and ease of shareholder suits 7. Paying taxes – Number of taxes paid, hours per year spent preparing tax returns and total tax payable as a share of gross profit 8. Trading across borders – Number of documents, cost and time necessary to export and import 9. Enforcing contracts – Procedures, time and cost to enforce a debt contract 10. Resolving insolvency – The time, cost and recovery rate (%) under a bankruptcy proceeding According to the World Bank, the Doing Business project also offers information on following datasets: a) Distance to frontier – Shows the distance of each economy to the “frontier,” which represents the highest performance observed on each of the indicators across all economies included since each indicator featured in Doing Business; b) Entrepreneurship – Measures entrepreneurial activity. Includes data directly from 130 company registrars on the number of newly registered firms over the past seven years; c) Good practices – Provide insights into how governments have improved the

regulatory environment in the past in the areas measured by Doing Business; d) Transparency in business regulation – Data on the accessibility of regulatory information measures how easy it is to access fee schedules for 4 regulatory processes in the largest business city of an economy. In 2018, Nigeria scored 145 out of 190 points in the rankings. The Doing Business in Nigeria 2018 ranking compared business regulations in our 6 states and FCT. It measured progress since 2014 in four areas of starting a business, dealing with construction permits, registering property and enforcing contracts. It found that 29 states implemented 43 reforms across the four areas, making it easier for local entrepreneurs to start and operate a business. Kaduna, Enugu, Abia, Lagos and Anambra showed the largest advance toward the global good practice frontier. Covered in the indices are matters such as electricity that the LCCI mentions. Some of the issues are now subject of regulatory review in ongoing work on the Companies and Allied Matters Act in the National Assembly. The indices have a global application because of the commonality of the issues across countries and regions. It would be interesting to receive a more detailed case for Nigerian exceptionalism from our foremost chamber of commerce based on its research. It should include implementation modalities for carrying out the research. It would be a major contribution by LCCI to developing the business environment in Nigeria.

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Inlaks to integrate NIRSAL National Microfinance Bank into unified IT platform

Pg. 15

C O M PA N Y N E W S A N A LY S I S A N D I N S I G H T

CONSUMER GOODS

Chellarams Plc faces steep test as economy bites OLUFIKAYO OWOEYE

ast week, Chellarams Plc, one of Nigeria’s conglomerates, with interest in a wide range of businesses released its third quarter (Q3) financial statement for the period ended 31st December 2018, revenue dropped marginally by 0.8percent to N8.49 billion against N8.56 billion in Q3 2017. Despite the increase in revenue, the Group’s Loss Before Tax stood at N1.12 billion in Q3 2018 from N2.52 billion in the corresponding Q3 period of 2017. The harsh operating environment and the dwindling purchasing power of consumers in Nigeria have in recent times impacted negatively on the bottom line of most consumer goods manufacturers in the country. Chellarams Plc is a conglomerate with many subsidiaries, some of which include Dynamic Industries Limited, Cheltek Industries Limited, United Technical & Allied Services, etc. It also engaged in the manufacturing and distribution of a wide range of products, encompassing consumables and industrial goods. As such, its activities are segmented into two broad categories: consumer goods and industrial raw materials. Examples of the products ma nu f a c tu re d by Chellarams Plc include bicycles, generators, industrial chemicals, butter, and frozen foods. They also process industrial raw materials such as cheese,

fat-filled milk powder, and skimmed milk powder, all for the fast-moving consumer goods sector. Asides manufacturing, Chellarams also provides maintenance services, distribution services, marketing/retail services, etc. Note that one of Chellarams’ most recognisable brands in Nigeria is the Kentucky Fried Chicken (KFC) which has branches located across the country. The company was officially incorporated in 1947, even though it had been operating in Nigeria since 1923. It listed on the Alternative Securities Market (ASEM) of the Nigerian Stock Exchange. Why the stunted growth in Chellarams? A look at the company’s financials for the full year 2016 and 2017 shows that a large proportion of the company’s revenues are earned from Fast Moving Consumer Goods (FCMGs), the sale of plastic film, and industrial chemicals. For example, of the N12 billion in revenue earned by the company in 2016,N3.8 billion was from FCMG, N2.7 billion was earned from industrial chemicals and N3.8 billion from the sale of plastic film. FCMG comprises sale of milk. This has left the company at the risk of exchange rate volatility as was witnessed in 2016. Exchange rate losses increased from N400 million in 2016 to N600 million in 2017. Sadly, revenue has also been declining across key segments. Revenue from the FCMG segment declined from N7.5 billion in 2015 to N3.8 billion in 2017. Revenue from Industrial

chemicals also declined from N10.8 billion in 2015 to N2.7 billion in 2017. The company recently signed an MOU with Germany’s largest dairy manufacturer, DMK, and by implication, it will supply products that were hitherto imported into the country namely Oldenburger, Real Milk, and Regal Milk. Competing with different players As one of the leading Nigerian conglomerates with stakes in both consumer goods and industrial products, Chellarams Plc finds itself competing with quite a number of other companies.

Some of these competitors include other companies engaged in the manufacturing of milk products, including Frieslandcampina WAMCO Nigeria Plc, Promasidor Nigeria Limited, Nestle Nigeria Plc, etc. Kentucky Fried Chicken is also being challenged by the likes of Chicken Republic, Sweet Sensation, the Place, Tastee, and so many other fast food restaurants that are emerging by the day to take advantage of Nigerians’ crave for junk food. Other competitors include bicycle manufacturers in Nigeria, industrial chemical producers, and marketers, power generating compa-

nies in the country, etc. Any hope for Shareholders Figures from the March 2017 annual report show 33% of the company’s revenues go to paying of employees, wages salaries and benefits while 36% goes to providers of capital Outlook Chellarams has over the past few years failed woefully to compete in a market that is rife with competition and consumers spoilt for choice. This should not be the case. As one of the oldest companies with a slew of products and a good reputation to the booth, this company should be domi-

nating the markets where it operates while its competitors trail behind. The Muril Cheleram led management team must rejig its business model, and most importantly leverage its nearly century-old manufacturing experience to save its declining financial records. Chellarams Plc may also need to embark on a fundraising drive in order to fully reposition and be able to compete. Until this is done, this company may continue to play second fiddle in the areas it operates, struggling to compete even as its revenues and profits continue to plunge.

LOGISTICS

Red Star Express unchanged as investors snub impressive nine-month results OLUWASEGUN OLAKOYENIKAN

igeria’s licensee of the Federal Express Corporation, Red Star Express Plc, has improved profits by a quarter in the nine months ending December 2018 amid high costs, but the performance is yet to reflect on the company’s stock. The stock which opened at N5 per share remained

unchanged after the close of business Monday on the floor of the Nigerian Stock Exchange (NSE), this is despite a declaration of N363 million profits by the logistics company last Friday. The stock of the courier firm had on Friday gained 4.17 percent to reach an over four-month high of N5 per share, making its year-to-date return

which stood at 19 percent outperformed the NSE All Share Index. Although, there was a significant surge in the volume of the stock traded to 670,124 units from 229,144 units recorded in previous session which show investors exchanged ownerships, the transactions however left its stock price the same throughout Monday’s

trading session. In the nine months ending December 2018, Red Star Express grew revenue marginally by 4 percent to N7.56 billion from N7.09 billion achieved in the same period of 2017. The increased sales however came at a cost to the firm as its cost of sales rose by 20 percent to N5.74 billion from N4.59 billion achieved previously. Ow-

ing to this, gross profit rose paltry by 13 percent to N1.82 billion from N1.61 billion while its gross margin waned to 24 percent from 26 percent. Red Star Express was unable to control its cost effectively in the review period as seen in its finance cost which grew bigger by 35.6 percent. The firm recorded a whooping N14.95 million

Edited by LOLADE AKINMURELE (loladeakinmurele@gmail.com) Graphics: CHINEDUM ONYEMA

as net finance cost from N3.25 million a year earlier. The company’s huge spending was not enough to overwhelm its gross profit for the period. This was evident as pre-tax profit rose to N534 million amidst its immense costs from N428 million, while post-tax profit increased by almost a quarter to N363 million from N291 achieved previously.

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Wednesday 30 January 2019

COMPANIES & MARKETS GAS

CMA CGM Group reports first LNG fuelled vessel in its fleet STEPHEN ONYEKWELU

MA CGM Group, French container transp or ta tion, shipping company and the second largest shipping operation in Nigeria has reported that the first liquefied natural gas fuelled vessel in its fleet was successfully bunkered with LNG. Bunkering is generally applied to the storage of petroleum products in tanks, and the practice and business of refuelling ships. The vessel, the 1,400 TEU Containerships Nord, was delivered to CMA CGM subsidiary Containerships, by Wenchong Shipyard, Guangzhou, China, last month. It is the first of four LNG dual fuelled containerships on order at the shipyard for the CMA CGM subsidiary, according to Marinelog, an online maritime platform. This complies with the new Maritime Organisation’s regulation, which limits sulphur content in fuels used by ships. Under the new IMO 2020 regulation, ships cannot use fuels

with more than 0.5 percent of sulphur, compared with 3.5 percent now, unless equipped with so-called scrubbers limiting the emissions. In this first LNG fuelling, Containerships Nord received around 240 metric tons of LNG – an amount that can take her on a roundtrip from Rotterdam to St. Petersburg and back sailing through the Kiel Canal twice. The bunkering was carried out at lay bay berth in a ship-to-ship LNG bunkering operation from Shell’s bunker vessel, the Cardissa. In future, bunkering will be carried out at a normal operational berth simultaneously with loading and discharging operations. Bunkering procedures are based on detailed hazard identification and safety assessments. All vessel crew have passed essential LNG bunkering specific training, and safety is a priority throughout the bunkering operation. Tahir Faruqui, general manager, Shell Global Downstream LNG, said: “We are proud to supply Con-

L-R: Opeyemi Iwaloye, national sales manager, Nestle Waters Nigeria; Mercy Kuye, distributor, Nestle Waters Nigeria; Gloria Nwabuike, head, marketing, Nestle Waters Nigeria; Folusho Jinadu, general manager, Garmas Nigeria Limited, and Deborah Jaiyeola, south branch manager, Nestle Waters Nigeria, during the Re-Launch of Nestle Pure Life in Lagos yesterday. Pic by David Apara

tainerships with a cleaner burning and viable fuel for the shipping industry. LNG bunkering is a very safe operation and we look forward

to conducting simultaneous operations with Containerships in the future.” Lekki Port LFTZ Enterprise (LPLE), the promot-

ers of Lekki Deep Seaport, recently signed a Memora n d u m o f Un d e r s t a n d ing (MOU) with CMA CGM Group, which translates to a

25 percent stake in the Lekki International Container Terminal making it the second largest shipping company in Nigeria.

BANKING

CONSUMER GOODS

Ecobank Pay to elevate SME participation

Guinness to empower millions of smallholder farmers with a new scheme

ISRAEL ODUBOLA

he Managing Director and Chief Executive Officer of EcoBank, Patrick Akinwutan, Nigeria Limited, said that Ecobank Pay Solution, which is Africa’s first unified digital payment solution, aims to bring more digitalization to the Nigerian economy and elevate the effective participation of small and medium sized businesses in the country. Akinwutan made this disclosure at a media interactive session on Monday, saying that Ecobank Pay Solutions deliver value of payment transaction swiftly, foster sales transparency for merchants, improve transactions between customers and their trading partners and strike out the risk of payment repudiation and exposure to fraud and pilfering. “The traditional ways that payment are made using cards on Point-of Sales (POS) means that merchant, the small business persons, traders, owners of supermarket, distributor, that entity that is holding PoS needs to wait at least for 24 hours to get the value of the payment”, he said. Speaking further “Ecobank Pay solution is quick response (QR)-based; therefore it is you making the payment that determines that you are making payment. There is no input or activity on the part of the merchants” “Users just need to look at the QR or the merchant ID the same way they are the ones buy-

ing airtime themselves or making transfer to another party. Users make payment instantly using the Merchant ID or the QR image of the merchant.” Talking about the benefits merchants can derive from the multi-featured digital payment solution, Akinwutan said that merchants will get their funds immediately instead for waiting for one day, and this improves working capital especially for small scale businesses. As regard transaction security, Akinwutan disclosed that customers making the payment have absolute control over their payment information. He said that customers are only to handover payment to merchants and not the payment information. “And finally, the merchant is assured that all payments received is not with a risk that another person can repudiate”, he said. Ecobank Pay Solution is a rebrand of the Ecobank Scan plus Pay Quick Response offering, which allows customers to pay-in-store via the Ecobank mobile app. Launched last year, the platform was designed to deliver unified and quick instant selfservice across a range of interconnected payment solutions. The payment channel can be used by all businesses from small informal micro-merchants to large corporates as well as government, allowing them to offer and stress-free payment options to their customers in-store or online.

ONYINYE NWACHUKWU, Abuja

uinness Nigeria Plc. has launched its agriculture scheme tagged “Grow with Nigeria” which will empower millions of smallholder farmers in the country as well as help the Federal government’s effort to drive agricultural development and economic diversification. Baker Magunda, Managing Director, Guinness Nigeria said the scheme was to further demonstrate a commitment to the Federal Government’s policy on diversification and local content, the growth of the agricultural value chain as well as that of the smallholder farmers who form an integral part of our business. He said that over the last twenty years, Guinness Nigeria has consistently sourced all its core ingredients such as sorghum and malt extract locally through the various local raw material chains but that the launch was to further take the patronage to a higher dimension. “Currently, our local content sourcing is 75 percent,” Magunda said, “and we plan to increase this significantly within the next couple of years.” He said these partnerships have enabled them

to develop an ecosystem of private sector players creating value that impact smallholder farmers directly. He said that in 2018, Guinness Nigeria partnered with 5, 121 smallholder farmers across eight states of Nigeria. These farmers were provided access to finance, certified seeds, unadulterated inputs, mechanization, training on good agronomic practice and basic bookkeeping, supplier credit process, extension support and access to the market. He said with this intervention, Guinness Nigeria was able to leverage on the collaboration as provided by the respective partners in the ecosystem to improve the livelihoods of these farmers by moving them from subsistence level to full economic inclusion. With investments in Agriculture, local manufacturing and backward integration, the Guinness Nigeria Local Raw Materials (LRM) initiative, has benefited over 6,000 subsistence farmers, rural traders and various stakeholders in the production value chain. Officials say that the LRM initiative despite its current focus on rural subsistence farmers is helping to create value in local markets, strengthening

state and national economies, improving agricultural systems, enhancing food security, and boosting supplies of sustainable raw materials that meet global standards. Guinness Nigeria is in partnership with CBN, Stanbic IBTC, OCP Africa, AFEX Commodity and OXFAM in ensuring the success of the initiative. In attendance at the launch were, Audu Ogbeh; Minister of Agriculture and Rural Development; Olukayode Oluwole, Head, Agric Credit Support Division development Finance Department CBN; Andrew Mashanda, Executive Director Corporate and Investment Banking Stanbic IBTC; Ambassador. Sunday Dogonyaro, Non-executive Director Guinness Nigeria, Farmers, Vendors amongst others. Speaking on the initiative, Minister of Agriculture and Rural development, Audu Ogbeh commended Guinness Nigeria on this laudable initiative. “When Guinness began buying sorghum from local farmers many of us realized that this was a revolution that started ahead of its time,” he stated. According to him, the logic of buying raw materials from local Farmers has seen wealth being moved

into the rural areas instead of out of the shores of Nigeria, “because every time you import anything, you are importing poverty and exporting wealth and dangers not visible. “I am very proud of Guinness Nigeria and I urge other manufacturers to do same,” Ogbeh noted. Guinness Nigeria is a subsidiary of Diageo Plc, a global leader in beverage alcohol with an outstanding collection of brands across spirits, beer, and wine categories. Stanbic IBTC Bank the financial partner of the initiative reassured farmers of its commitment to providing financial solutions that will help them and their businesses grow through its agriculture desk. The bank has injected over 50 billion naira into Nigeria’s agricultural sector and this is one of the largest investments recorded in the sector so far. At the event, Farmers who performed well for the 2018 farming season were also recognized and rewarded for their effort. Yoila Hanabi, the winner was presented with a Threshing machine worth N750, 000. Hajara Barau and Atiku Abdulahi; the first and second runners up were presented with bags of fertilizer.

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TECHNOLOGY

Inlaks to integrate NIRSAL National Microfinance Bank into unified IT platform JUMOKE AKIYODE-LAWANSON

he Nigeria IncentiveBased Risk Sharing System for Agricultural Lending (NIRSAL) has appointed Inlaks, a leading system integrator in Sub-Saharan Africa, as its implementation partner to help it host on the National Association of Microfinance Banks Unified Information Technology (NAMBUIT) platform. The NIRSAL National MFB is an initiative of the Central Bank of Nigeria (CBN) in collaboration with other major stakeholders like The Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) and the Nigerian Postal Service (NIPOST). The purpose of the bank is to compliment the efforts of the CBN towards addressing the needs of Nigerians at the bottom of the pyramid and deepen financial inclusion. BusinessDay gathered that the NIRSAL National MFB will

commence operation with ten (10) take-off branches in January 2019 and then expand branch operations to all 774 local governments of the federation. “All NIPOST outlets nationwide will eventually be used as branches for the bank in addition to other branchless innovations from Inlaks. This is to enable the new bank achieve the required speed in reaching out to Nigerians in rural areas,” Inlaks said in a statement. Femi Adeoti, managing director, Africa perations at Inlaks, explained that the unified platform is comprised of a core banking system and sub-systems for agent banking, non-interest banking and mobile payment among other services. “NAMBUIT is a Software as a Service (SaaS) platform and will drive the operations of the proposed National MFB in a way to reduce operational costs as well as improve the Bank’s ability to provide necessary information to agencies such as CBN and Nigeria Deposit Insurance

Corporation (NDIC). The Nigeria Police Force (NPF) Microfinance Bank (NPFMFB) with 28 branches across the country is another nationally rated microfinance bank already live on the platform. In addition, about 50 unit microfinance banks (spread all over the country) have also been on boarded,” Adeoti said. The NAMBUIT platform runs on Temenos T24 Inclusive Banking System (IBS) and implementation is being managed by Inlaks in accordance with global best practices, with support from the CBN. The platform has also been integrated into the Nigeria InterBank Settlement System NIBSS) platform. Experts say that a core benefit of the NAMBUIT platform is the smooth on-boarding of the microfinance banks (MFBs) into the national payment system thus enabling the MFBs to lower their operating costs significantly. The platform boasts of intelligent tools for reporting so that the MFBs can easily transact and switch among themselves.

L-R: Sunday Olawuwo, director of music, Archbishop Vining Memorial Church Cathedral; Kufre Ekanem, managing director, Philosoville Limited, initiator of Hymnodia; Dupe Ige Kachi, singer, songwriter and voice coach, and Seun Owoaje, pianist, composer, music lecturer, Obafemi Awolowo University, Ile-Ife; at the Hymnodia reality show audition in Lagos. Pic by Pius Okeosisi

PUBLIC INSTITUTIONS

BoI confirms 1.2m beneficiaries, N12bn disbursement on ‘Trader Moni’ HARRISON EDEH, Abuja

he Bank of Industry (BoI) on Friday confirmed that 1.2 million Nigerians , many of whom are at the lower end of the pyramid financially, have so far benefited from the federal government’s Trader Moni’ programme which is specifically targeting petty traders. Toyin Adeniji,thge Executive Director Micro Small and Medium Enterprises Development at the Bank of Industry told newsmen in Abuja that the scheme targets 2 million petty traders who would not have passed the text of traditionalbanksinaccesstofinance,as she revealed that BoI is giving business supportservicestoensurebetterutilisation of the fund for small businesses. “Less than 1% of the Bank loans given in Nigeria goes out to the small scale business,hence this initiative of the federal government to drive financial inclusion using the instrumentality of the Trader Moni, which is one of the componentofthefederalgovernment’s Government Enterprise and Empow-

ernment program,GEEP.”Toyin said. The Executive director in her further remarks revealed that the scheme is larger part of the Government Enterprise and Empowerment Programme,GEEP which seeks to promoteaccesstofinanceandfinancial inclusion. While giving further insight to the GEEP programme,she said,”GEEP’s’s first product,MarketMoni,is a loan between N50,000 and N300, 000 for the endofmicroenterprises:traders,market women,youth,and artisans qualify for this. According to the BoI official,the cooperative societies help to ensure that these loans are returbed. There are currentlyover350000smallbusinesses that have accessed MarketMoni loans since 2016. GEEP she explained further has second product,which is FarmerMoni,which starts at N300,000 and are for farmers in farming clusters,via farm aggregations.”A BVN,farming cluster cooperative, cluster aggregator,and end-to-end process

up to off-take agreements are required for FarmerMoni.” Also in her explanations,she noted that ,GEEP’s third product which is TraderMoni,is a microcredit loan for the petty traders.The Scheme she said is designed to meet the need of the larger population of Nigerian microenterprises who do not meet the need of the larger population of Nigerian microenterprises who do not meet the more stringent requirements of BVN,bank accounts,market associations and cooperatives. While giving an update on the scheme,she informed that,”Since launching the programme,we have provided these loans to over I.5 million Nigerians in over 2,600 markets and clusters across the 36 states of the country and the FCT working with over 4000 agents. “About 53% of beneficiaries of GEEP Program me are female,whereas 46% of the beneficiaries are below the age of 35.We also give them business supportservicestoensurethatthereisa sustainabilityintheirfinancialmanagement of businesses”she adds further.

CONSUMER GOODS

Nestle, P&G, others strike a deal at WEF to fight plastic pollution OLUFIKAYO OWOEYE

ne of the biggest takeaways from the just concluded WEF in Davos, Switzerland is the cheering news that some of the world’s biggest brands in the consumer market space have agreed to roll out plans aimed at saving the environment. In recent times, environmentalists around the globe have raised an alarm over the increasing rate of Plastic pollution and its adverse effect on the environment and aqua life. According to experts, about 8 million metric tons of plastic are thrown into the ocean annually. Of those, 236,000 tons are microplastics– tiny pieces of brokendown plastic smaller than the little fingernail. By 2050, experts say there will be more plastic in the oceans than there are fish (by weight) Environmentalists have ad-

vocated for a “reduce, reuse, recycle,” strategy, however, almost all of the attention has been paid to recycling. Now some of the world’s biggest consumer brands are trying to shift the focus to the second R, with a program that provides their products in reusable containers that can be returned for a refund. The durable packaging program, called “Loop” was debuted at the World Economic Forum this week Led by New Jersey-based recycling company TerraCycle, Loop will offer popular products from about 25 companies including Nestle, Unilever, Procter & Gamble and PepsiCo in reusable containers that customers order online or purchase in stores and return to the company when finished. TerraCycle said it is finalizing grocery partnerships in the U.S. and Toronto, adding distribution through London’s

Tesco later this year, and targeting Tokyo in 2020 and other African markets. At the Davos Conference, Ramon Laguarta and James Quincey, Chief Executive Officers of two of the world’s top soft drink makers, PepsiCo, and Coca Cola came together for talks on how to control and recycle plastic waste in the world. Ramon Laguarta noted that PepsiCo is working hard to ensure that all of its packaging materials are recyclable and biodegradable come 2025. So far, the company has already begun testing out biodegradable materials in readiness for full implementation. Simon Lowden, President of PepsiCo’s Global Snacks Group, noted that reusability does bring an additional element of complexity. “We are looking to help build a world where plastics need never become waste,” he said.

L-R: Olumide Balogun, head of marketing, West Africa at HMD Global; Apekhade Idogho, chief marketing offcier, Renmoney; Adewale Yusuf, CEO of Techpoint Africa; Eyram Tawiau, founder, Leti Arts and Adekunle Sonola, executive director, Commercial Banking, Union Bank at the Techpoint Build 2019 partnered by HMD Global, the Home of Nokia phones in Lagos. Pic by Pius Okeosisi

L-R: Tonya Lawani, CEO, Seal Group and convener of the Lagos Enterprise Summit; Ibijoke Sanwo-Olu, wife of the All Progressives Party (APC) governorship candidate, and her husband, Babajide Sanwo-Olu, during the Lagos Enterprise Summit in Lagos.

L-R: Omolaja Odunuga, medical director, GSK; Austin Omoigberale, president, Paediatric Association of Nigeria; Wilson Ilemobade-Aderele, and Kehinde Soyemi, regional medical adviser, GSK, at the 50th Paediatric Association of Nigeria Annual Conference, Ibadan, Oyo State.

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‘Payment service banks will deepen financial inclusion space’ Ifie Sekibo, managing director, Heritage Bank Plc, recently spoke to journalists in Lagos where he highlighted some key industry trends and what to expect in 2019. Excerpts: Hope Moses-Ashike and Seyi John Salau Heritage Bank has been able to make some marks in the banking sector over the years: However, what is Heritage Bank’s outlook for 2019? t Heritage Bank it has been an interesting journey for us, we came at a time when the market was almost turning into depression in the financial space; the capital market was going down, but somehow we were able to find a space in the area of SME banking and retail, and we have kept the promise to be able to make SMEs bankable, not necessarily by throwing money at them but by being able to educate our entrepreneurs that the need for corporation and partnership is more important than the need for raising loans to be able to run their businesses. That has paid off over time because we have seen more and more co-operation among entrepreneurs, they have consolidated their businesses, they have gone into areas they hitherto would not have been able to go into; we have seen young lawyers come together to help these nursing organisations keep proper records in terms of their incorporation and records in how they do business; again small accounting firms have been able to put together these organisations in terms of financial record keeping for tax proposes; and we have been able to measure their progress over the period. So, I think we have lived up to our promise as a bank, especially with one of our proposition - SME clinic, helping SMEs to grow, and we have also taken that a bit further to grooming new entrepreneurs in the ‘Next Titan’ which is in its fifth season by this year, where we allow young minds come in, develop products, busi-

nesses, ideas, and take them from scratch unto a platform where they are able to express themselves, even on national television and what they can possibly do for the nation in our development space; and I believe going forward we are going to continue in this space of SMEs because it is really the bedrock of any development of any country. On the back of that is the challenging issue that most of our people lack financial services products that they could latch onto; so there is this financial inclusion synergy being spearheaded by the Central Bank and we are all latching onto it. Agency banking is also a veritable vehicle with which we are trying to help the financial inclusion space of the country, and we believe that we would have to increase that space and as we increase the financial inclusion space, you put more people in the economy, thereby development could continue to grow. What purpose do you think the Vanguard Economic Discourse is out to achieve? It is still that same issue of trying to expand the pipe, expand the cake which we are all building in terms of our country where we want to expand how much we grow our economy; how much we grow our GDP; how much we have more people rather than queue up for no jobs – what do you do? Do you develop the human beings or do you develop the economy: they go hand-in-hand. You heard the discussant say we need inclusive development rather than grow human capacity or develop economy; we want both at the same time, and in that space – if there is no discourse, people don’t seem to have disjointed executions. This whole idea of having a

Ifie Sekibo

vision of what we want to do, create proper target of what we want to do are the things we are looking forward to achieving with this. So, our sponsoring is partnering Vanguard to say we understand this is a veritable vehicle for our country to develop her human capital, grow her economy and make the earth bigger; so that those coming behind, based on technology, agriculture, will have a space of expression on what they really want. One trend we see in the industry is that banks are finding it hard to attract borrowers; what is responsible for this trend? These are functions of the general economy and if a sector is not growing; there is no need to borrow because if you borrow into a sector that is not growing, you are destroying capital and the last thing you want to do in a growing economy is destroying capital. So, when they say customers are not borrowing – customers are being realistic because if you borrow money into a growing econ-

omy (like I discussed the issue of power in the course of the panel); I said because we are already massed out in the capital space; unless we do something further, there is no need to borrow in the power space, and if you borrow further in the power space and you are not able to pay because you are not generating enough power and do not generate enough money to repay what you have borrowed; you are going to destroy that capital. And, I said yes – the reason for not much borrowing is because the income that will sustain that borrowing does not exist, and we need to create avenues for those incomes to come back to life for people to begin to borrow again. As we talk about the human development index and economic growth: what are the policy options for government? Policy options are a lot, but I do not want to jump into being a government to say this is what a policy option should be. What we

have canvassed is that in dealing with the policy option that you would enunciate, be it a new government or a continuing government; is that it should be all inclusive; it should not be all about human development or economic growth. It has to be inclusive; we have to take a view – are we planning to pull out x percentage of people below the poverty line to above the poverty line; then what does it take. Do we need to deal with our infrastructure deficit, what does it take? Do we need to increase our social investment, what does it take; but in all these there is a thin line that runs through them? If there is no savings there cannot be investment; and if there is no investment there cannot be development; so we have to work through that trend, and until we have a policy that addresses these trends, we will not be able to achieve our inclusive development. Despite the challenging financial environment in 2018, most of the banks in the country were able to pull through; what do you think is the outlook of the banking sector this year? The outlook will stay stable – we have seen the naira stay stable almost all through last year. We had our electioneering campaign almost up till the ending of last year and the naira stayed stable without any major fluctuation and there are in fact no fluctuations, and we believe that trend will continue. And, we believe with a new government, the other part that always takes flight – which is the portfolio investors that take flight at the end of the year, even if there is no election; they want to take flight at the end of the year to see if they can consolidate themselves and come back in. They stay around the borders and run back in; be-

cause there is not going to be any significant change in the climate: they will come back and we will see the capital market ramping up again. Yes, there is a little bit of downward trend; we expect that to ramp back up within the second/third quarter. We still expect good results this year – that is my prediction. The payment service banks are expected to takeoff this year based on the CBN’s guidelines; how are the banks preparing to take up the likely competition from this payment service banks? Am sure you have read the guidelines for these banks; they are not lending banks, they are essentially going to assist us. For us they are enablers for the financial inclusion we are talking about; it is not necessarily a competition. Yes it is a competition to the extent that we would compete with them in the financial inclusion space – our agency banking products will compete with their payment platforms. We all have very good payment platforms; most of us, our payment platforms have developed much more than where they could even be able to compete. But for us it is important that we have such other organisations that help the lower side of our economy where people put money under their beds; people leave money in their stores – fire comes; burns the store and their investment and they are back to square one: we need to eliminate all that and bring more people unto the former platforms, so we can measure them. Today we don’t have good measurement for how much money is in circulation in Nigeria, but if we can get these new institutions to join us to expand the financial inclusion space; we believe it is better for the economy and its better for everybody.

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High production cost hurts local dairy makers Stories by Josephine Okojie

i g e r i a’s a m b i t i o n to boost its dair y production may not crystallise if the cost o f p ro d u c t i o n f o r local makers remains higher than imported brands. The situation is further worsened by the low productivity of local cattle breeds and increasing tension and conflicts between herders and farmers. Experts say that the high cost of production is a disincentive for processors to off-take from local dairy farmers. They noted that the inability of local manufacturers to compete has halt investments in the sector and progress made by the government in boosting local milk production to meet domestic demand. “We are not globally competitive in dairy production. It cost about N200 to produce a litre of in Nigeria as against imported powdered milk which is about N180 per litre,” Muhammadu Abubakar, managing director, L &Z Integrated Farms Limited told BusinessDay. “This is coupled with the fact that the Federal Government had lowered the tariff on imported milk last year and with the difficult operating environment, then how can local dairy farmers compete with producing a litre of milk at N200?” Abubakar asked. The Nigeria’s dairy industry is divided into the upstream where

the breeding and production of milk takes place, mid-stream which is the cold chain infrastructure and the downstream where the processors operate. “The livestock sector is the most neglected subsector under the agricultural sector. We need to increase tariffs and make processors competitive to grow our industry,”Udeme Etuk, managing director, Chanan Eloá Integrated Farm Ltd said at a meeting with the Food and Agricultural Writers

Organisation of Nigeria (FAWON). “Nigeria is yet to tap from the enormous opportunities in our dairy industry. The spin off effect from the sector is large and yet the government has continued to neglect it. “We do not have any beef based business in Nigeria. This is because of the huge challenges players in the industry experience,” Etuk said. Livestock productivity in Africa’s most populous country is among the lowest globally. Holstein

Growsel receives software donation from Oracle for agric crowdfunding programme Josephine Okojie

rowsel, award-winning non-profit agricultural crowdfunding organization has received a software donation from Oracle NetSuite Social Impact for its social impact programme. With the strength of NetSuite, Growsel will be able to operate more efficiently, freeing up resources to help it focus on its core mission of connecting underserved smallholder farmers with lenders around the world. “The NetSuite Social Impact software donation will surely help us cut down our administrative overhead, considering our lending portfolio which is growing rapidly, just like our community of smallholder farmers that are being administered around the w o r l d ,” Je r r y O c h e, f o u n d e r and chief executive officer of Growsel Microfunds Inc. said in a statement made available to BusinessDay. Growsel, since inception has facilitated the connection of more than 200 smallholder farmers

and over 1300 lenders, while profiling and verifying about 1.2 million of them for crowdfunding through its field partners in remote communities, particularly in West Africa economies. In p u r s u i t o f i t s m i s s i o n o f c h a n g i n g l i v e s, c r e a t i n g opportunities by connecting smallholder farmers with lenders around the globe in a bid to alleviate poverty, Growsel has empowers millions of smallholder farmers in developing economies, working with the assistance of local field partners and trustees. Currently, Growsel has selected Oracle NetSuite to support its fastgrowing need for a comprehensive and cloud-based international Enterprise Resource Planning (ERP) solution. The organisation will utilize Oracle NetSuite to automate many of its day-to-day business tasks, reporting and accounting needs. Through the comprehensive ERP platform, Growsel will have the ability to expedite the entry and validation of expense reports for dozens of globetrotting employees; add automation and efficiency to the organization’s lending and

expense categorization, as well as access tools with greater reporting and analytics capabilities. According to the statement, previously time-consuming tasks will be streamlined to greatly reduce time spent on reporting by staff. Growsel will be able to better manage its internal processes on a departmental basis, while also providing a secondary view to donor and lenders of the organization. With tools and features that obtain lending funds, borrowers request and operating budget status at a glance. Speaking during the donation, David Geilhufe, senior director and social impact leader NetSuite said “we value the work Growsel is doing to create a lasting change in the agricultural community.” “For over 10 years we have aimed to help more organizations do good, better. It’s through donations like these that we hope the NetSuite platform will empower organizations like Growsel to take its mission further,” Geilhufe said. Growsel emerged 2018 winner of the Visa Everywhere Initiative Award for financial inclusion in the Sub Saharan Africa edition.

Friesian, a breed of dairy cattle from Netherlands average milk yield is 3540 litres per day while Nigeria’s most popular cattle breed Bunaji (white Fulani) has an average milk yield of 1-2 litres per day. This underscores the need for the government to prioritise breed improvement for farmers to increase their yields per litre. To address this, the government has recently initiated a National Livestock Development Plan to address the issues of low yield per

litre. Africa’s most populous country dairy industry comprises milk, cheese, yoghurt, ice-cream, butter and infant formula. A report by Agusto & Co. says that the milk segment remains the largest in the industry, accounting for an estimated 61 percent of the industry’s turnover. Nigeria imports over 95 percent of finished and raw milk. The country spends an average of $481 million (N173bn) on milk importation yearly, accounting for six percent of total food import in 2016, according to the country’s livestock policy document. Nigeria’s national dairy output per annum is 700, 000 metric tons while the national demand is put at 1.3 million metric ton annually, leaving a gap of 600,000MT, according to the Federal Ministry of Agriculture. To ensure that Nigeria’s dairy farmers become competitive as their global counter parts, Industry experts called on the government to support the industry by bridging the huge infrastructural gaps to reduce local production costs for farmers. “Infrastructure in the dairy industry currently is zero and we cannot grow the industry without it. This is what the government is supposed to focus on and not cutting down tariffs,” Abubakar who was earlier quoted said. “We can only compete with the imported milk producers when the enabling environment to drive down production cost is provided. All we ask is a playing level field,” he added.

Ekiti targets self-sufficiency in food production Akinremi Feyisipo, Ibadan

armers in Ekiti State have been urged to fully key into the state and federal government policies on Agriculture for them to enjoy maximum benefit and also make the state government realise its plan to make Ekiti self -sufficient in food production. Oludare Abegund, permanent secretary, Ministry of Agriculture and Rural Development, gave the charge while declaring open the training and seminar organised for enumerators that would carry out registration of farmers in AdoEkiti, the Ekiti State capital. The Permanent Secretar y explained that the training exercise would enable the enumerators to generate data about farmers in the state. He said the data would include farm locations, farm size, type of crop to be planted by farmers, names of their co-operative societies and several other vital documents that would assist the government in the sector. Abegunde, who explained that the United Bank for Africa (UBA) was invited for the training to enable participants register for their Bank Verification Numbers

(BVN) urged the farmers to cooperate with the officials and process their BVN as it would give them opportunity to enjoy certain privileges from the government. He also implored the participants not to allow financial benefits to override the aims and objectives of the programme. General Manager of Fountain Agricultural Marketing Agency (FAMA), Olugbenga Odesanmi in his own contribution disclosed that the training was in collaboration with the Nigeria Incentives-Based Risk Sharing System for Agricultural Lending and the United Bank for Africa (UBA). He noted that the trained Seventy Enumerators and Fifty Canvassers would not just collate data for the government but also assist farmers to key into the programme and provide other essential services to them. A par ticipant from AdoEkiti Local Government, Rasaq Ayomide, who appreciated the Kayode Fayemi-led administration for organizing the training exercise encouraged far mers across the sixteen Local Government areas to avail themselves of the opportunities and fully key into the programme.

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Nigeria’s agric revolution hinges on tech, collaboration – Experts Josephine Okojie

xperts in the agricultural sector have said that Nigeria will only experience its agricultural revolution when technology and collaboration are adopted to boost farmers’ productivity. The experts, who spoke during the Agro Money Initiative, organised b y C a s h Yo u r Pa s s i o n Africa, express optimism that with innovation and collaborations in the sector, agriculture will drive the country’s economic growth. “If we must achieve agricultural revolution, far mers need to adopt technology and innovation,” Babatope Dare, executive director, Inlaks said. “ Te c h n o l o g y a n d i n n ov a t i o n h o l d g re a t promise in boosting agric productivity and resilience in a sustainable way,” Dare said. He stated that the sector is evolving and that lack innovation is fast slowing the growth that would have been

Gbenga Awe, group head-agric finance, Heritage BanknPlc; Babatope Dare, executive director, Inlaks; Lynda Omerekpe, founder and CEO, Cash Your Passion Africa and Beidget Okonofua, president, Unique Women In Agriculture Cluster Initiative (UWIACI) during the Empowering the Millennial Agropreneur programme in Lagos recently.

recorded in the sector. Nigeria is populated by 190 million people who must be fed with staple foods ranging from yams, rice, cassava to beans, bananas and tomatoes. However, there is still much demand-supply gap

in most of the staple foods, even as the population growth rate stands at 3.2 percent per annum. The experts say that for Nigeria to attain high level of food sufficiency and reduce dependenc y on food imports, it has to adopt

RMRDC donates cashew shell nut machine to FUNAAB Josephine Okojie

n a bid to promote value addition in cashew production, the Raw Material Research and Development Council (RMRDC) has donated a cashew shell nut oil extractor machine to the Federal University of Agriculture, Abeokuta (FUNAAB). In a statement, Abiola Adeagbo, state coordinator RMRDC, while presenting the machine disclosed that the council is poised at developing local industries. Adeagbo said that RMRDC has realized the enormous work being carried out on cashew in the University both in research and teaching as well as on the cashew kernel

snacks, adding that such work prompted the council to partner with the University. “The University is having combined advantage, particularly in the area of cashew and we are developing local contents, certainly, we have to key in to them and work together, so that we can move the commodity to the next level”, he said. He commended FUNAAB for putting into good use previous facilities donated by the council, saying it has encouraged them to continue with the partnership. He stated that the machine will bring about employment generation to FUNAAB and Nigeria as a whole. Professor Kolawole Salako, vice-chancellor of

FUNAAB commended the RMRDC for fulfilling its part of the Memorandum of Understanding (MoU) signed with the University and promise to donate a cashew shell nut oil extractor machine to the institution. Salako, who noted that the extractor machine will add value to the University’s Cashew Processing Unit, saying that it would also improve the economic status of the institution. “What you should know about value-addition for any raw material like cashew, cassava and the rest is that once you process them further, you have added value,” he said. “The machine will be used to extract industrial products like oil and the rest, that will be useful in some industries,” he further said. He further added that the machine which will be used for commercial purposes at a premium scale and will assist in generating funds for the institution.

technology and innovation in its food production. Available statistics show that Nigeria is one of the least mechanised farming countries in the world with the country’s tractor density put at 0.27 hp/ hectare which is far below the Food and

Agriculture Organisation ( FA O ) ’s 1 . 5 h p / h e c t a re recommended tractor density. Also speaking during the event, Onyeka Akuma, founder and chief executive officer, Framcrowdy said that with collaboration farmers will be empowered to boost their productivity. Akuma noted that businesses achieve more when they collaborate, while highlighting ways Farmcrowdy is collaborating with farmers to increase their yield per hectare. He urged youths to take advantage of the opportunities across the value chains by addressing challenge limiting players in the sector. “We need to start creating solutions to the problems other people complain about,” Akuma said. Bridget Okonofua, president, Unique Women In A g r i c u l t u re C l u s t e r Initiative (UWIACI) said that since agriculture is becoming more vibrant, technology and innovation are inevitable. “If we do not get into

smart farming through the adoption of agriculture, we will not attain our food security target,” Okonofua said. Speaking on how farmers can leverage finance, Gbenga Awe, group headagric finance, Heritage Bank Plc said that lack of technology has made it complex for financial institutions to properly evaluate production, thereby making it difficult for banks to finance smallholder farmers in the country. Lynda Omerekpe founder and CEO of Cash Passion, Africa and convener of the Agro Money said that the initiative is to foster empowerment for young people through agriculture. She stated that the initiative is helping youths identify the opportunities in various value chains and training them in agriculture as well as mentoring. The event which also had three agropreneurs pitched their business for grant to scale up. The pitched competition was won by Krixto Bax Limited, a poultry business.

Nigeria approves Pod Borer Resistant Cowpea

he Federal Government of Nigeria has recently approved the Pod Borer Resistant Cowpea (PBR) (beans) developed by the Institute for Agricultural Research, (IAR) Ahmadu Bello University, Zaria for environmental release. The approval was contained in a decision document issued by the National Biosafety Management Agency (NBMA) granting permit for the environmental release of the PBR Cowpea which has been genetically modified to resist the insect pest - Maruca Vitrata. IAR in partnership with the African Agricultural Technology Foundation (AATF) commenced the research to address the deadly Maruca Vitrata attacks on beans in 2009 after series of efforts to use conventional breeding methods failed to produce results. Professor Ibrahim Abubakar, executive director, IAR, during the presentation of the GM beans summarised the process that led to the development of the PBR cowpea saying the decision to venture into genetic modification in cowpea breeding was as a result of pest

infestation that has over the years made cowpea farming difficult as farmers get less for their efforts and even have their lives exposed to danger due to chemical spraying to keep the pest away. “Cowpea is the most important food grain legume in Nigeria. The low yield of the crop in Nigeria is due to many constraints particularly pod boring insects which cause up to 90 percent yield loss in severe infestation cases,” Abubakar said. T h e a p p rov a l m e a n s the crop is safe and posed no harm to human and the environment and can now be submitted to the National Variety Release Committee for consideration and registration as a commercial crop in Nigeria. The PBR Cowpea, by this development, becomes the first genetically modified food crop to be approved in the country. The introduction will address the national cowpea demand deficit of about 500,000 tonnes and also improve the national productivity average of 350kg/ hectare. Abdourhamane Issoufou, country director, AATF said

that since the mid-80s, cowpea scientists have declared maruca as the main limiting factor of cowpea production in Africa hence the intervention of the AATF based on its principles of providing access to appropriate technologies by small scale farmers. “AATF was able to obtain access to the Cry1Ab gene used for this modification on humanitarian basis and worked with institutions in Nigeria, Ghana, Burkina Faso and Malawi for the transformation. Today, Nigeria stands tall in the comity of nations for effectively managing and bringing to fruition this dream. The research results have shown that the PBR-cowpea is safe for human and animals, c o mp l e t e l y re s i st a nt t o Maruca; leads to yield increase of 20 percent with fewer sprays of chemical insecticides,” Issoufou said. Also, Alex Akpa, acting director general, National Biotechnology Development Agency (NABDA) said that by the approval, Nigeria has registered her name among the global scientific community as a country capable of finding solutions to her challenges.

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Nigeria loses over $25.3bn in freight charges to foreign owned ships in 3 years Stories by Uzoamaka Anagor-Ewuzie

igerian ship owners have lost over $25.3 billion paid to foreign ship owners by importers and exporters as freight charges on goods imported and exported out of the country. This massive loss can be blamed on the failure of Nigerian ship owners to acquire standard oceangoing vessels in order to have the needed capacity to compete with their foreign counterparts. According to statistics from the Nigerian Maritime Administration and Safety Agency (NIMASA), Nigerian shippers paid a total sum of $9,087,585,117.5 as freight for dry and wet cargo to foreign ship owners in 2015. In 2016, Nigerians also paid a total of $7,551,304,167.12 to foreign owned ships while a total of $8,601,881,176.08 fright charges were lost to foreign vessels in 2017. On the number of vessel call, the NIMASA data shows that in 2016, a total of 2,047

vessels brought in dry cargo import; 987 vessels lifted dry cargo export while a total of 2,468 vessels lifted wet cargo import and export cargoes. In 2017, a total of 1,967 vessels of dry cargo import were received at the port; 1,145 vessels of dry cargo export while a total of 2,294 vessels of wet cargo import and export were handled in Nigerian ports. Speaking on the implications of the data, Hassan Bello, executive secretary/CEO of the Nigerian Shippers’ Council (NSC), who presented a paper titled ‘Indigenous Fleet Development: What Options?,’ at the 20th anniversary lecture/awards & patrons’ investiture ceremony of the League of Maritime Editors, said that the above scenario has led to a situation where for instance, a total sum of $9,087,585,117.5 was paid as freight for dry and wet cargo to foreign ship owners by Nigeria in 2015 alone due to absence of Nigerian owned fleet plying international trade. According to him, Nigeria has not been able to reap immense potential and economic benefits of being a littoral state, due to the fact

R-L: Jatto .A. Adams, representative of the managing director (NPA)/general manager, Corporate & Strategic Communications (C&SC) receiving the award from Hassan Bello, executive secretary of Nigerian Shippers Council during the event.

that all Nigerian exports are shipped “Free on Board” (FOB), while its imports are shipped ‘Cost Insurance Freight’ (CIF). Bello said that the above statistics buttresses the point that there has been the recurring trend of economic losses in Nigeria over the years till date. “The maritime sector is bedeviled by several constraints, mainly due to the

SIFAX consortium promises customer-friendly services at Warri Port

cean and Cargo Terminal Services Limited, the SIFAX Group-led consortium has assured the Federal Government and other stakeholders of its resolve to turn around the fortunes of the Terminal B, Warri Old Port through efficient service delivery. Taiwo Afolabi, chairman of the consortium gave the assurance at the formal signing and handing over of Terminal B, Warri Old Port to Ocean and Cargo Terminal Services Limited by the Bureau of Public Enterprises (BPE) and the Nigerian Ports Authority (NPA) in Abuja last week. Ocean and Cargo Terminal Services Limited won the concession with a competitive bid of $100.78 million and the consortium is expected to run the terminal for 25 years. In April 2018, the company was announced the preferred bidder of the Port, out of the seven other companies that bided. According to Afolabi, the combined experience of all

the members of the consortium shows that the project would be another resounding success. “This is great news for us as a company to have led this consortium to win the concessioning of the terminal. While we are glad that we have emerged the concessionaire of the Warri Terminal, we are not unaware of the enormous responsibility this success has conferred on us. “However, it is a familiar territory for us having operated successfully in the last 12 years, the Terminal C of the Tin-Can Island Port, Lagos. We will fall back on the experience and expertise we have developed over the years to make a difference at the Warri Port. We have started mobilising our team to hit the ground running and I assure that in no time, the fortunes of the Warri Port will change for the best,” Afolabi said. A d e ku n l e O y i n l o y e , group managing director of SIFAX Group, said that the company is known for its adherence to international

best practices and compliance with agreed contracts. Stating that the Consortium will set standards with the management of the new terminal, Oyinloye said that BPE, NPA and other relevant government agencies should look forward to an efficient port management system. He said that clients would be given unparalleled customer-focused service delivery as the consortium has resolved to adhere strictly to the terms of the concession agreement. Earlier, Alex Okoh, director-general of the BPE, noted that the objectives of the Federal Government in concessioning the port is to increase efficiency, improve service delivery, modernise port development, reduce the cost of shipping and clearing of goods at the ports and relieve the government of the burden of financing the sector. He urged Ocean and Cargo Terminal Services Limited to focus on these objectives as they take over the Warri terminal.

financial crisis facing ships owners and maritime operators. In spite of the fact that the industry in Nigeria is endowed with enormous prospects that are waiting to be maximised, the difficulty in accessing funds by indigenous ship owners has posed a huge threat to the sector,” Bello said. Bello, who pointed to the fact that oil rigs in Nigerian waters and the vessels which

service them are owned and controlled by foreigners, said that even the vessels involved in coastal trade and inland waterways covered by the Coastal and Inland Shipping (Cabotage) Act are mostly controlled by foreign ship owners. Stating that Customs duties for vessel importation are considered by the shipping business community as prohibitive, Bello said

that Nigeria ship owners pay to the tune of 14 percent of the total cost of a vessel to the Federal Government as import duty on vessels and their spare parts. “As a result of this, even Nigerians vessel owners prefer foreign registry that enables them to bring in their vessels under temporary importation permit (TIP), which only demands 1 percent of the total cost and is renewable every year,” Bello disclosed. He listed other financial challenges facing the nation’s shipping sector to include absence of adequate tax relief period; lack of investment capital; absence of longterm concessional funding; withholding tax on interest, dividends, dollar accounting etc; uncertainties; lack of guarantees and assurances on investment, which had in the past resulted in the high debt profile of maritime industry in the financial sector of the economy. Continuing, Bello pointed at absence of exemption from Customs duties and absence of benchmarking with other progressive maritime states as challenges facing the nation’s maritime sector.

Apapa: Truck associations move to ease gridlock on port access roads

ruckers, under the aegis of the Containerised Truck Owners, the Association of Maritime Truck Owners (AMATO) and Container Truck Owners Association of Nigeria (COTOAN), have expressed their determination to work towards eliminating the gridlock on roads leading to Apapa and Tin-Can Island ports The idea, they say, was to help their businesses recover from the menace of the gridlock and check drivers’ fatigue and other threats to the health of road users. This was contained in a joint statement of AMATO and COTOAN signed by Remi Ogungbemi and Wasiu Oloruntoyin, and issued after

a meeting of its leadership in Lagos at the weekend. According to the statement, lack of automation system to regulate movement of trucks going into the ports to pick cargoes and drop exports or empty containers; as well as extortion of money between truckers and security operatives in order to gain advantageous positions on the queue along the port roads are among the challenges facing truck operators in the nation’s seaport. “Absence of modern and befitting public terminals has seen a large number of truckers without garages parking on the roads and bridges,” the statement further said. The statement, which said that the operators are cur-

rently relating with relevant authorities to create enabling working environment for its members, said that the Nigerian Ports Authority (NPA) has approved the manual call-up system for trucks. Stating their resolve to imbibe and test-run the system, the truckers appealed to members to give the call-up system a trial. “All trucks should leave the roads and wait in their garages to collect call-up before coming to the roads. Let us endeavour to submit all required information/ documents to facilitate issuance of the call-up. On extortion, the statement, which blamed its members for encouraging extortion by bribing their way to gain vantage position or to make illegal runs against oncoming traffic, advised members to put an end to such acts. The statement further urged the truck associations and members to endeavour to work towards bringing professionalism to the fore in their work.

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Tax Issues

Expert makes ‘conditional’ case for VAT rate hike ... says Budget 2019 based on doubtful assumptions IHEANYI NWACHUKWU

n what looks like a conditional position in favour of the much touted Value Added Tax (VAT) rate hike, Olufemi Awoyemi, Founder, Proshare said additional revenue from such decision should be channeled to road and rail construction across the country. Awoyemi said in a paper he presented at the 2019 budget seminar organised by the Chartered Institute of Taxation of Nigeria (CITN) that “In times of slow growth, economists would typically not prescribe raising taxes, but since Nigeria currently has the lowest Value Added Tax rate (VAT) in West Africa at 5percent, the government could be bold to increase VAT by at least 200 basis points pushing the rate up 2percent.” The Budget 2019 assumes a fairly stable world economy and a predictable international oil market with average market oil prices above $60 per barrel. “Both assumptions are doubtful,” Proshare founder noted further. His words, “As far as budgets go, the Federal Government of Nigeria’s Budget 2019 is modest, mild and uninspiring; it has a number of broad flaws: it fails to excite vision, it fails to ignite passion and it simply tries to steady a course that has seen the economy stall to a growth rate of about 2percent (max-out); a figure which the latest IMF estimates expect to be the growth index for 2019.” He believes that the FGN should

be thinking of hiking low-base tax rates such as VAT and cutting tax rates on corporate and personal incomes while expanding the number of people that pay tax. “Nigeria’s tax revenue as a proportion of GDP is still amongst the lowest in the world,” Awoyemi added. Others speakers at the seminar include, Femi Ademola, Managing Director, Investment Banking at Cordros Capital Limited who spoke on “Capital Investment: Defining the minimum for Growth Catalysation”; and Biodun Adedipe, an economist/ founder, B. Adedipe Associates Limited who made a presentation titled, “Budget 2019: Evaluating Social Safety Net For

Poverty Alleviation”. Awoyemi in his paper titled “Fiscal Projections Of The 2019 Budget: Challenges and Prospects” noted that the budget expects revenue of N6.97trillion with 52.9percent coming from oil revenues, 11.5percent from Company Income Tax (CIT), 3.3percent from Value Added Tax (VAT) and 10.2percent from Joint Venture (JV) Equity Restructuring. Also, Customs is expected to stump up 4.3percent of revenue in 2019; while Signature Bonuses on oil contracts will slip in an additional 1.2percent, Domestic Recoveries and Fines 2.9percent, Donors and Grants 3percent and other Independent Revenue sources will bring

in 9percent. Following from the previous observation, the 2019 budget’s projection of an average oil price of $60 per barrel is dangerous. The soft global economy is likely to continue right through first-half (H1) 2019. Admittedly oil price is about $62.70 at the beginning of the week which started on Monday, 21 January, 2019 but that has been the outcome of recent sharp cut backs in supply, weak global demand may still see prices drop below the $60 per barrel budget threshold. Awoyemi said that the Budget does not in any creative way address the challenges of low productivity amidst a growing unemployment (a natural consequence of a rising population and low mortality rates); adding that the Fiscal deficit built into the 2019 budget will hurt growth and private sector expansion. “Over the last four years the deficit as a proportion of GDP has risen and led to higher domestic interest rates chased by larger Treasury bill (T-bill) issues and slower GDP growth. The slower growth in GDP has shown up in the worsening unemployment statistics.” Nigeria’s unemployment figure in third-quarter (Q3) 2018 was estimated at 23.1percent. The economy has increased the absolute number of unemployed by 15 million in the last three years, meaning that an average of 5 million new jobs need to be created annually to keep unemployment rate at its present level

(for starters). To do this the economy must grow by at least three times the present growth rate of 1.9percent in Q3 2018. This is near fiction from an aggregate sovereign perspective (politics discounted). The 2019 FGN budget relies heavily on an oil output and sales of 2.3million barrels per day. In a world of excess crude supply; slowing growth in major Asian markets of China and India; and with America exporting oil at an unprecedented level of over 10 million barrels per day, the budgets projection of output at 2.3million barrels per day is extremely optimistic. The Organization of Petroleum Exporting Countries (OPEC) in which Nigeria is a member, has already agreed a cut back of daily oil supplies by 1.6million barrels per day (by December 2018 cut backs had reached 750,000 barrels per day with Saudi Arabia accounting for half this amount). Nigeria and Libya that were previously exempted from cut backs have now been included in the basket of nations that would need to reduce supplies to stabilize international prices. Rising economic nationalism across the globe, especially in America, Europe and Asia, indicate that the global economy will struggle for growth in 2019. The World Bank has revised down its 2019 growth projections from 3.0percent to 2.9percent. This equally suggests that the budget growth projection of 3.5percent for the local economy is a leap of faith rather than logic.

KPMG Tax Alert

Executive Order 007 on The Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme Background is Excellency, President Muhammadu Buhari, GCFR, on 25 January 2019, signed the Executive Order No. 007 on Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme (“the Scheme”). The Scheme is for a period of 10 years from its commencement date. The Scheme is a public-private partnership intervention that enables the Federal Government of Nigeria (FGN) to leverage private sector capital and efficiency for the construction, refurbishment and maintenance of critical road infrastructure in key economic areas in Nigeria. Participation in the Scheme is open to every Nigerian company, acting on its own or in concert with other Nigerian companies, and institutional investors (hereafter referred to as “Participants”) wishing to construct or refurbish any road identified and designated by the FGN as an “eligible road” under the Scheme. Participants will be entitled to utilize the total cost, hereafter referred to as “Project Cost”, incurred in the construction or refurbishment of an eligible road as a Tax Credit against their future Companies Income Tax (CIT) liability, until full cost recovery is achieved. As an incentive, Participants will be granted a single nontaxable uplift on Project Cost. The uplift will be included in the total Tax Credit available to each

participant. Unique features of the Scheme: •The Scheme guarantees Participants a minimum recovery of 100% of their Project Cost. This is a significant improvement on previous infrastructure development incentives that offered taxpayers limited cost recovery ranging between 30% - 70% of their investment. •Participants are permitted to act in concert (i.e., as a collective) to finance and oversee an eligible road project(s). Each Participant in the collective will be separately entitled to a Tax Credit in proportion to its financial contribution. •Tax Credits will be issued to Participants annually based on construction milestonesachieved,andwillbecomeimmediatelyavailableforuse.Thisisanother noteworthy distinction from previous infrastructure development incentives. •Participants may sell or transfer the whole or part of its unutilized Tax Credit to any interested party, subject to complying with protocols prescribed in the Scheme. This means that a Participant, who for any reason does not wish to utilize its Tax Credit, may easily recover its investment without recourse to the FGN. •The Scheme will be administered and implemented by the Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme Management Committee2 (“the Committee”). The Committee, which will serve as a one-stop liaison office for the Scheme, is expected to reduce the

administrative bottlenecks typically associated with dealing with multiple ministries/parastatals in obtaining approval of road projects. KPMG Comments: A strategic imperative for Economic Growth and Recovery in Nigeria is the development of road/ transportation infrastructure by leveraging private sector capital and capability. The ultimate objective is to encourage industrialization, improve productivity of and competitiveness in the manufacturing sector. Road infrastructure has an enabler effect, either directly or indirectly, on most sectors of the economy – particularly the manufacturing sector. Currently, about 90% of passenger and freight movement across Nigeria is done by road. This implies that road transportation is quite integral to the growth and development of the economy. Unfortunately, budgetary allocation to road projects has repeatedly proven to be insufficient to meet road infrastructure demands. In 2018, for instance, the FGN allocated approximately 12% (about N344bn) of its planned capital expenditure for the year to the construction and rehabilitation of about twenty roads nationwide. Presumably, it is the insufficient capacity to finance road projects from the budgetary allocations that had necessitated several Public Private Partnerships (PPP) including the Infrastructure Tax Relief introduced in 2012.

While these programs have had their merits and recorded successes, the outcome of these initiatives has not necessarily matched the demands for road Infrastructure. It is, indeed, arguable that drawbacks of the past initiatives have contributed to their limited success. For instance, issues around full cost recovery, administrative bottlenecks, ease of participation, funding, etc. have had a deterrent effect on taxpayers would otherwise have participated in a PPP road project. In theory, the Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme should address most of these limitations and encourage private sector participation in road development. With emphasis placed on ease of participation in the Scheme, the extent and timing of capital recovery and alternative methods for extracting the value of tax credits, it is expected that large corporates, particularly those whose operations are currently hindered by access to motorable roads required for evacuation of their products, will be encouraged to channel capital towards road development and refurbishment – both as corporate social responsibility and also with a view to eventually recovering their cost through tax credits. This Executive Order presents a golden opportunity for manufacturing companies, particularly those operating around industrial clusters, hubs and trade zones to mobilise and

direct capital towards the refurbishment of those roads, including feeder roads and highways, which are most critical to the movement of inventory and products, shortening supply lead times and optimizing the manufacturing supply chain. Likewise, corporates with large balance sheets, who have the ability to aggregate private sector capital and manage large projects efficiently, should see this Scheme as an opportunity to fast-track rehabilitation and provision of the much-needed road infrastructure in Nigeria. On the part of the FGN, adequate road infrastructure should improve the conditions for business operations in Nigeria, increase business profitability, enhance employment and, by extension, tax revenue in the long run. There is also the opportunity for the FGN to redirect funds that ought to be used for road projects towards the development of other sectors of the economy. In our view, the potential upfront diminution of tax revenue to the FGN should be more than adequately compensated for by a short to medium term improved performance of the economy and the overall long term multiplier effect. On the whole, we are optimistic that the Scheme will be instrumental to closing the widening infrastructure deficit in Nigeria and promoting the overall growth and development of the economy.

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Frequently Asked Questions about taking motor insurance policy

L-R: Owolabi Salami, executive director; Coenraad Vrolijk, non-executive director; Fola Adeola, chairman; Sunkanmi Adekeye, managing director; Anuj Agarwal, non-executive director; Dickie Ulu, independent director; and Ayodele Akande, non-executive director, all board members of Allianz Nigeria, during Allianz Nigeria Insurance plc launch in Lagos at the weekend.

Allianz Group finally launches in Nigeria to explore the local insurance space …Targets retail expansion in 2019 Stories by Modestus Anaesoronye

he nation’s insurance industry is set to witness major leap in growth, innovation, technology, technical capacity and most importantly improved ethical practice with the final birthing of global insurance giant, Allianz Group under the name Allianz Nigeria Insurance plc. This development is not only expected to ignite stronger competition among players in the industry, but further revolutionize theinsurance space that is already witnessing disruption by increasing consumer choice for quality service delivery. Allianz Nigeria Insurance plc (Allianz Nigeria) erstwhile known as Ensure Insurance plc was acquired by the Allianz Group in July 2018, while also having fulfilled all regulatory requirements to rebrand the company to Allianz Nigeria. The Allianz Group - headquartered in Munich, Germany is one of the world’s

leading insurers and asset managers. The Group manges over 650 billion euros on behalf of its insurance customers, while their asset managers – Allianz Global Investors and PIMCO – manage an additional 1.4 trillion euros of third-party assets. In 2017, over 140,000 employees in more than 70 countries achieved total revenue of 126 billion euros and an operating profit of 11 billion euros for the Group. In Africa, Allianz is currently present in 17 countries and accompanies clients in 39 countries. The formal launch on Friday at the Harbour Point offAhmadu Bello Way, Victoria Island - which had in attendance major stakeholders in insurance and the financial services sector as well as the presidency -depicted the strengthand vast network of this global insurance leader. FolaAdeola, chairman of the company in his brief welcome address at the eventsaid “at a time when the country was losing foreign direct investment, the company was getting them and

more is expected to flow in”. He assured the commitment of the board and management to live up to the global standard set by Allianz and to add value to the Nigerian insurance space. Coenraad Vrolijk, regional CEO of Allianz Africa said the company is strongly committed to its business in Africa, where it is present in 17 countries, stressing that the company is dedicated to deploying considerable technical skill resources and innovations to strengthening business for clients. He said the Allianz Group views Africa as one of the important future growth market, adding that in 2017, over 140,000 employees in more than 70 countries achieved total revenue of 126 billion euros and an operating profit of 11 billion euros for the Group. Owolabi Salami, executive director, Allianz Nigeria who could not hold his joy, beamed about finally having Allianz in Nigeria. “By launching in Nigeria, Allianz gains full access to this key insurance market in Africa and this marks a major milestone for

Allianz’s long-term growth strategy on the continent”, he enthused. “We are optimistic about the limitless potential of this future growth market”, Salami concluded. Sunkanmi Adekeye, managing director, Allianz Nigeria Insurance plc joins his voice, noting thatthe coming of Allianz to Nigeria will enable it contribute to offering the best products and services to Nigerian customers in both personal and commercial lines, stressing his optimism about the limitless potential of Nigeria’s growing insurance market. Allianz currently offers micro-insurance solutions to 500,000 low-income households on the continent, and the firm looks forward to exploring that more fully in Nigeriawhile looking more closely at cyber liability insurance coverage. Ludivine Delfaut, regional head of Communications for Allianz Africa, said the event marks the official entrance of global insurance giant, Allianz, into the Nigeria market with the launch of its local operating entity, Allianz Nigeria.

Q: What is NIID? A: NIID stands for Nigerian Insurance Industry Database. It is a PLATFORM to verify the genuineness of your Insurance Policies. Q: What is USSD? A: USSD is a SHORT CODE (*565*11#) to access instant information about your Motor Insurance on NIID. Q: How do I confirm if my motor insurance is genuine? A: Dial *565*11# on your phone and follow all the instructions. Q: Can the USSD Code work on any mobile phone and with any network? A: YES. Q: Should I leave space between numbers and the alphabets in my vehicle registration number or policy number? A: It is not necessary. Q: Should I enter my vehicle registration number or policy number in capital or small letters? A: Either of the two is acceptable. Q: What should I do if my Policy is not found using the USSD Code? A: Contact your Insurance Company or call NIA on 0817-0784444. Q: What should I do if I receive a message “Policy Expired” using the USSD Code? A: Contact your Insurance Company for renewal of your policy or call NIA on 0817-078-4444. Q: How long does it take a new Policy to reflect on NIID? A: Within 24 Hours. Q: Can I buy a genuine motor insurance cover through USSD Code? A: No, *565*11# is to verify the genuineness of your motor insurance Policy. Q: What is Motor Insurance? A: Motor Insurance is an arrangement in which you pay money (Premium) to an Insurance Company to buy protection against financial

loss in case your car is stolen or damaged or you accidentally damage someone else’s property with your vehicle. Q: Is motor insurance compulsory? A: Yes. Motor Third Party Cover (the least cover) is made compulsory in Nigeria by Section 68 of Insurance Act 2003 and Motor Vehicle ( Third Party) Ordinance, 1945. Q: What are the different types of motor insurance covers available? A: There are three (3) different available covers (a) Third Party Cover Only - It covers your financial responsibility arising from the use of your motor vehicle in case you cause the death or bodily injury or damage to the property of a Third Party to the limit of N1million. (b) Third Party Fire & The Cover - It covers all the benefits listed in (a) above, as well as damage to your vehicle in case of fire accident or if your car is stolen. (c) Comprehensive Cover - It covers all the benefits listed in (a) and (b) above as well as any other accidental damage to your own vehicle. Q: Is motor insurance expensive? A: No, motor insurance is relatively cheap and not costly, but the cost depends on the type of cover you want and some other factors peculiar to your vehicle (such as make, value, use etc.). Q: How can I get an insurance discount on my Comprehensive cover? A: By being a good and safe driver with no record of accident. Q: What happens if I have an accident? A: If it happens, you are expected to make a request for a claim compensation or loss settlement from your Insurance Company for your covered loss or damage following laid down claims process.

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Pension Today

BUSINESS DAY

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With growing inflation, what is the safety of my pension contributions?

he annual inflation rate in Nigeria rose to 1 1 . 4 4 p e rc e n t in December of 2018 from 11.28 percent in the previous month. It is the highest inflation rate since May, as prices continued to advance mainly for food, housing and utilities, according to figures from the Nigerian Bureau of Statistics. This trend is however a concern to a lot of pension contributors who have continually asked about safety and value of their pension funds, now and in the future. They are worried that their investment would have been largely eroded. But experts in the industry under whose watch this monies are kept said that though inflation remains a major issue, but it’s capacity to manage funds still puts contributors at safety position. According to them, it is the duty of the PFAs to administer the contributions and invest in such a way that will ensure safe and reasonable returns on investment. The reserve fund created by the PFAs under the Act would compensate for any erosion of the value of the contributions. The experts also provide clarifications on other issues bothering contributors: - Excerpt: What is the minimum of pension guaranteed under the new scheme? The minimum pension guarantee shall be determined from time to time by the National Pension Commission. What is the minimum period required by an employee to qualify for pension under the new pension scheme? There is no qualifying period for pension. If an employee works for an employer for one month, his pension contribution will be paid by the employer into the em-

ployee’s retirement savings account for that month. If the employee moves on the work for another employer for another year, his pension contribution will be paid by the second employer for another 1 year and it goes on and on like that. When will i have access to money in my RSA? Access to the RSA will only be allowed upon retirement. If an employee retires at the age of 50 years or more he/she can have immediate access to the RSA. similarly, if an employee retires before the age of 50 years due to mental or physical incapacity, he or she can have immediate access to his/her RSA. Whereas an employee who retires under the age of 50 years in accordance with the terms and conditions of employment will not access the RSA until after six months of such retirement if he/she does not secure another employment. Are pension contributions taxes free? Contributions to the new pension scheme are tax free. However, tax will be paid on the profit made from trading with the money in the Retirement Savings Account. How can i know what is happening with my money? Pension Fund Administrators (PFAs) will issue regular statements of accounts and profit from investments to the employees. Can i withdraw any portion of the amount in my RSA before retirement? Withdrawals from the RSA can only be made upon retirement. However, where an employee makes additional of voluntary lump sum contributions into the RSA, he can withdraw such money before retirement or attainment of the age of 50 years. Or in the event of loss of job and after four months the contributor fails to secure another job. What happens to the balance in the RSA after

Aisha Dahir-Umar, director general, National Pension Commission (5th from left) handing over licence to the delegation

any initial lump sum withdrawal? The balance in the RSA will be used to procure an annuity that provides regular income to the contributor or fund a programmed withdrawal. What is a programmed withdrawal? A programmed withdrawal is a method by which the employee collects his retirement benefits in periodic sums spread throughout the length of an estimated life span. What is an annuity? An annuity is an income purchased from an approved life insurance company which provides monthly or quarterly income to the retiree during his/her lifetime. What happens when an employee who has been contributing under the new scheme dies before his retirement? Where an employee who has been contributing under the new pension scheme dies before his/her retirement, his retirement benefits shall be paid to his beneficiary under a will or the spouse and children of the deceased or

RC634453

Diamond Pension Fund Custodian Limited 1A, Tiamiyu Savage Street, Victoria Island, Lagos State. Tel: 01-4613753, 2713680, 2713954 Fax: 01-2713955 Email: info@diamondpfc.com Website: www.diamondpfc.com

in the absence of a wife and child, to the recorded next of kin or any person designated by him during his/her life time or in the absence of such designation, to any person appointed by the probate registry as the administrator of the estate of the deceased. Where my employer fails to make monthly remittances for me what can I do? According to the Pension Reform Act (PRA) 2014, employers are legally bound to make contributions on behalf of their employees within 7 working days after the payment of salaries. The PRA 2014 also empowers PenCom, subject to the fiat of the Attorney General of the Federation, to institute criminal proceedings against employers who persistently fail to deduct and/or remit pension contributions of their employees within the stipulated time. Cases of unremitted pension contributions should therefore be brought to the notice of PenCom directly or through your Pension Fund Administrator (PFA). Where it appears that my monthly remittances are less than the amount being

deducted from my monthly salary, what do I do? For Public Sector Workers: It is important to note that the National Pension Commission (PenCom) has discontinued the use of documentary evidence for remittance purposes. Public sector employees are to liaise with their employers to include their correct details on the Nominal Roll to be submitted directly to PenCom. The Nominal Roll is used by PenCom to retrieve employees’ details from various Ministries, Departments and Agencies (MDAs) to enable them determine the actual pension benefits due to individual employees based on their current grade levels and steps.Kindly liaise with your employer to include your details on the Nominal Roll to be submitted to PenCom. We assure you that where more remittances are made on your behalf, your account will be credited and you will be notified accordingly For Private Sector Workers: Please be advised that contributions are credited to individual Retirement Savings Accounts (RSAs) with

narrations based on advice received from your employer. Therefore, we advise you liaise with your employer showing your RSA statement for the period in dispute. How do I monitor my contributions? When an employee opens a Retirement Savings Account (“RSA”) with a Pension Fund Administrator (PFA), that PFA is required to issue periodic statements of account showing how much has been contributed as well as returns on investment generated from the contributions. What happens to my RSA and contributions when I change employers? When a Retirement Savings Account is opened and a PIN created, this PIN remains with you for life. This means that a change of employer would have no effect on your Retirement Savings Account. H o w e v e r, w h e n y o u change your employer, it is important that you do furnish your PFA with the details of your new employers. At the same time, furnish your employers with your PFA and PFC details.

This section is created to increase awarness and deepen knowledge about the contributory pension scheme. If you have enquiries or contributions, send to this e-mail: diamondpfcbusday@yahoo.com

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Changes in legislation, regulation key risks in Nigeria …while businesses raise concern over data breaches, cyber risks Stories by Modestus Anaesoronye

he key risks facing Nigeria at this time in her history are a concer n to businesses and organisations. The annual survey on global business risks from Allianz Global Corporate & Specialty (AGCS) show that changes in legislation, regulation are major concern for businesses. Data breaches and privacy scandals, major IT outages and the introduction of tighter data protection rules in many countries are now a core concern for businesses in 2019 and beyond. According to the Allianz Risk Barometer 2019, Cyber incidents ( 37 percent of responses) are neckand-neck with Business interruption (BI) (37 percent of responses) as the top business risks globally .Climate change(#8 with 13 percent of responses) and Shortage of skilled workforce (#10 with 9 percent of responses) are the biggest climbers globally. At the same time companies are more worried yearon-year about changes in legislation and regulation (#4 with 27 percent of responses) resulting in im-

L-R: Segun Omosehin, managing director/CEO, Mutual Benefits Assurance Plc;. Akin Ogunbiyi, chairman, Mutual Benefits Group, his wife, Dotun, and Femi Asenuga, managing director, Mutual Benefits Life Assurance with members of the Mutual Choir during the group’s 23rd annual thanksgiving service in Lagos.

pacts such as Brexit, trade wars and tariffs. The annual survey incorporates the views of a record 2,415 experts from 86 countries including CEOs, risk managers, brokers and insurance experts “Companies need to plan for a wide range of disruptive scenarios and triggers as this is where their big exposure lies in today’s networked society,” says Chris Fischer Hirs, CEO of AGCS. “Disruptive risks can be physical, such as fire or storms, or

virtual such as an IT outage which can occur through malicious and accidental means. They can stem from their own operations but also from a company’s suppliers, customers or IT service providers. Whatever the trigger, the financial loss for companies following a standstill can be enormous. New risk management solutions, analytical tools and innovative partnerships can help to better understand and mitigate the modern myriad of business inter-

ruption risks and prevent losses before they occur.” Leading risks in Nigeria Changes in legislation and regulation are the top risk in Nigeria with 41 percent responses, up by 8 percent from the 2018 results. Market developments remains unchanged at #2 with34 percent of responses. In 2018 theft, fraud and corruption was at#1 but has now dropped to #3 with 30 percent responses. Loss of reputation or brand value at #6 with 23 percent responses

emerged as a new risk in the top 10. 2018 was a turning point for global trade, according to Ludovic Subran, chief economist of Euler Hermes and deputy chief economist of Allianz. US tariffs went up to 5.2 percent from 3.5 percent, bringing them back to the mid-80s and breaking with a history of preferring more sophisticated protectionism, such as regulation, over tariffs. Yet, the end-of-year trade truce with China is only postponing growing US

China rivalry as the backdrop for multinationals in 2019. As multilateral institutions struggle for a second wind, the rules of the games will be different for companies according to their shareholders, their location or the market they are after. While Nigeria is not immune from the US China trade war, the country also needs to ensure that the 2019 elections are free and fair. However, the country is a federation of states of varying size and economic power, encompassing a plethora of ethnic, tribal and religious groupings. These overlapping ethnic and religious identities are often in conflict with Nigeria’s federal system, as customary authority continues to play a crucial role in the country. Internal regional economic differences and endemic corruption pose ongoing threats to stability and inhibit effective policymaking. In particular, these threats are indicated through religious differences and disputed claims on oil resources. Disputes between state powers and indigenous groups (particularly in the oil-rich Niger delta) and the federal government over allocations of oil earnings have led to sharp divisions and lawlessness.

PenCom grants license to Nigerian University Mutual Benefits Assurance reaffirms commitment to human capital development Pension Management Company

utual Benefits Assurance Plc has reaffirmed its commitment to human capital development, stating that its staff remains the assets of the company needed to drive profitability and growth. They said it will continue to invest in training and retraining of its staff, even as it pointed the need to reward hard work and encourage those who show exceptional commitment in their duties. The company made the remark during its 23rd Annual Thanksgiving, where it also presented Long Service Award to 62 of its staff who have spent between five to twenty years in the employment of the company. 16 employees of Mutual Benefits Assurance Plc and 14 staff of Mutual Benefits Life Assurance Limited, a subsidiary of the former, were rewarded for their commitment to the firm’s vision in the last five years. 18 workers from the parent com-

pany and seven staff from its subsidiary, having spent ten years in the service of the insurance firm, were equally rewarded. Three staff each from Mutual Benefits Assurance Plc and Mutual Benefits Life Assurance Limited were rewarded after working for the underwriting firm for fifteen years, while Ashiru-Mobolaji Moruf got rewarded for his twenty years of service to the firm. Speaking at the, Akin Ogunbiyi, chairman of the company applauded all the awardees for their dedication to work and keying into the mission of vision of the company to be a top insurer of choice in Nigeria, urging other staff to emulate this gesture. While imploring the awardees not to relent on their oars, he charged the company’s staff to increase their productivity in a bid to further grow the bottom line of the underwriting firm. Ogunbiyi thanked God

for what he has done in his life and the life of the insurance firm, while applauding all the company’s stakeholders for the roles they played in the success story of Mutual Benefits. Speaking on the rationale behind the Annual Thanksgiving Service, he said: “Looking back to what God has done for us, it is essential to start the year with a thanksgiving service like this. The last 23 years are full of testimonies. The company still remains solid and one of the top players in insurance industry. So, we need to thank God for this, while praying for his continuous support in the life of this company.” Earlier, the managing director, Mutual Benefits Assurance Plc, Segun Omosehin, said, the management of the company was making numerous efforts to increase its top line and bottom line, a feat that was achieved in the outgone year.

he National Pension Commission (PenCom) has approved the issuance of a licence to Nigerian University Pension Management Company Limited (NUPEMCO)

to carry out the business of a Pension Fund Administrator (PFA). According to the commission, the approval is consequent upon a detailed evaluation of NU-

PEMCO’s compliance with the requirements, terms and conditions stipulated by the Commission. This is also a fall out of one of those agitations to have independence in management of pensions.

Helping low income people survive shocks

everal times it becomes issue of argument as to who needs insurance protection most. Is it the poor or the rich?. The truth is that everybody needs insurance, but the poor needs it most. A rich man that has plenty of cars in his garage may not feel it so much when one of them is stolen and he can afford to buy another one to replace it without sleepless night. This is not the same with the poor or one that is managing. If the wind blows off the roof of the poor man’s house, he may not be able

to replace it unless people come to his rescue. If his only can is stolen, he may not be able to buy another one in the next six months. With these, it becomes clearer that the poor who may not have a reserve cash to replace lost assets when it happens truly needs insurance protection. It is common thinking by many that insurance is for the rich because they are seen to have so many properties and assets that needs protection. But the reality is that while insurance is for everybody, it is most needed by those who do not have

the extra resources to replace loss assets. If that is the case, it then means that the poor are most vulnerable because they do not have fall-back resources as much as the rich. But experts say insurance is for everyone as longer as you have dependants, meaning that whether you are rich or poor, and as longer as you will not be there at a certain time to provide for your dependants, then you need insurance. So, one way or the other, we all need life insurance for either our self or for our dependants.

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Wednesday 30 January 2019

CITYFile

Hayat Foundation lauds assent to the disability bill HARRISON EDEH, Abuja

hairman and Founder of Hayat Foundation Amina Oyiza Yahaya Bello, has lauded President Muhammadu Buhari’s assent to the disability bill, describing it as a new dawn for persons living with disability. Bello said that the president has through the assent given life and hope to over 27 million disabled Nigerians to begin a new lease of life. “I think what the president has done is to give voice to the voiceless with the assent to the disability bill. Now, we have laws to back up our advocacy in whatever we are seeking answers to. With the law to back our advocacy up, it would be easier easy to seek a redress. She said: “Our expectations from the law enforcement agents is to assist in ensuring strict compliance to the dictates of the law; moving forward, we expect to see adjustments in public institutions to be able to make provisions for these set of people, as we see in more advanced climes.” According to her, “the next step moving forward is implementation. We expect to see public institutions gradually adjusting their buildings and public institutions also re-igniting their quota to absolve disability persons in their respective institutions. To this extent, we expect to see one or two persons in every organisations absorb those with disabilities.” In a related development, Robo Oduwole, the executive director of the foundation in a statement lauded the national commission for persons with disabilities, the special needs people living with disabilities on the assent of the bill and their full integration into the society.

More youths trained on fabric weaving MERCY ENOCH, Asaba

ore and more Delta youth are getting involved in the weaving of Akwaocha, a local fabric which is now being produced with modern weaving equipment and modern technique. Fifty youth made up of two youth from each 25 local government area of the state, would now begin their businesses in Akwaocha weaving and by so doing, make a living while also boosting the economy of the state. Before now, the weaving of the local fabric was only synonymous with elderly women but all that began to change since last year, when the incumbent administration in the state trained 60 persons mainly the elderly women and very few girls in modern technique. Not satisfied with the number of young fellows that benefitted from the first batch of the scheme, the state governor, Ifeanyi Okowa, directed that more 50 persons, especially youth be trained and empowered. This, he said would assist in meeting the increasing local and international demand for the native attire which has gone global. Result was that by the weekend, fifty youth who have just been trained in the skill for four months, graduated from the scheme and were equipped with starter packs consisting state-ofthe art weaving machines to commence operations immediately. This brings the number of the beneficiaries to 110 since the pilot scheme. The graduation ceremony of the 50youth was part of activities marking the second batch of the state government’s job creation exhibition ceremony which was rounded off at the weekend in Asaba, the state capital. Shortly after the graduation ceremony, the dexecutive secretary, Delta State Micro, Small and Medium Enterprises Development Agency (DEMSMA), Shimite Bello said that the training of the additional weavers became necessary in order to meet the increasing demands of the fabric, particularly at the international markets, stressing that currently, the Akwaocha is already trending at fashion shows in Lagos, London and Nairobi.

Members of the Nigerian Bar Association (NBA) protesting against the suspension of Walter Onnoghen CJN, in Abuja. Pic by Tunde Adeniyi

FG begins rehabilitation of 73km Calabar-Ogoja highway JOSHUA BASSEY

he Federal Government has flagged off the rehabilitation of the 73km Odukpani Junction-Ikot Okopra-Akpet 1 section of the Calabar-IkomOgoja road. The minister of power, works and housing, Babatunde Fashola, has flagged off the rehabilitation of the road on Monday in Biase local government area of Cross River. Fashola said the project would cost about N14, 017, 170, 597.90 and aimed at to bridging the infrastructural gap in the country. The project being handled by a local contractor, Sermatech Construction Company, is expected to be completed in 24 months. Fashola, represented by the minister of state in the ministry, Mustapha Baba-Shehuri, said the government was investing

in the provision of critical infrastructure with at least one road project per state. “This road links the industrial town of Akamkpa to Biase-Yakurr road. Its frequent plying by industrialists around the area led to its deterioration. “The shoulders of the road have been completely eroded, while the entire alignment is riddled with alligator cracks, as well as characterised by potholes. “The scope of work for the contract entails site clearance of shoulders, scarification of the existing failed carriage way and the provision of asphaltic concrete surfacing. “The scope of work also include, surface dressing of shoulders, concrete lined drains, de-silting of blocked culverts, reinforced concrete pipe culverts among others. “When completed, the road will greatly reduce vehicle operation maintenance cost, improve travel time, reduce accidents as well as loss of lives and proper-

ties. “It will also enhance the socio-economic wellbeing of the people along the corridor, generate employment opportunities for both skilled and unskilled labour and assist in the fight against crime,” he said. The director in charge of highways, construction and rehabilitations in the ministry, Yemi Oguntominiyi, said the massive infrastructure development was embarked on by the present administration across the six geopolitical zones in the country. According to Oguntominiyi, the rehabilitation is aimed at providing the much needed impetus to stimulate the economy and improve the lives of the people. The minister and his entourage also inspected other completed and ongoing rehabilitation projects along the CalabarIkom-Ogoja federal highway led by the Federal Controller of Works in the state, Bassey Nsentip.

NDLEA nabs 180 drug traffickers in C’ River

he National Drug Law Enforcement Agency (NDLEA) arrested 180 persons for drug abuse and illicit drug trafficking in Cross Rivers State in 2018 The state NDLEA commander, Anthonia Edeh, disclosed this in the command’s annual report released in Calabar on Monday. Edeh said that within the period under review, a total of 251.552 kilogrammes of Cannabis Sativa (Indian hemp) were seized from suspects. “Also 30.90 grammes of cocaine; 14.80 grammes of heroin and 22.5 kilogrammes of Psychotropic substances were seized,”

she said. The commander said that within the period under review, 51 drug offenders were sentenced to various terms of imprisonment ranging from six months to 10 years by the Federal High Court, Calabar division. According to her, 71 drug addicts comprising 64 males and seven females were counselled and reintegrated with their families. She attributed the successes recorded by the command in the year under review to the support and cooperation of the Cross River Government and members of the public.

“We need more of such support from the government and well-meaning citizens of the state in tackling drug menace in our society,’’ Edeh said. The commander decried the rising cases of drug abuse and illicit drug trafficking in the state, especially among the youth. She, however, called on parents to always insist on knowing the movement of their wards. Edeh also appealed to members of the public to furnish the agency with information about those involved in the sale of hard drugs and psychotropic substances in their neighborhood.

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INTERVIEW Better regulation of product distribution, reduction of influx of counterfeit will unlock growth potential in healthcare - Bayer Twenty-two years after its exit from Nigeria, Bayer returned with new investments in 2014, providing innovation in the healthcare and agricultural sectors. Mohammed Jimoh, managing director/head of Agency Business Covestro WCA, Bayer Middle East and Africa Ltd, in this interview with Modestus Anaesoronye, shares his vision for the company, areas of focus and impact on the Nigerian market. Tell us about your company and the industry you play in? ayer is a Research and Development(R &D) - based Life Science Company, active in the areas of crop protection and seeds, the area of pharmaceuticals (prescription drugs) and over-the-counter products, including vitamins, analgesics and anti-allergies. You are playing in a highly competitive industry. Tell us what differentiates you from your competitors? First of all,we are R&D-based. With more than 4.5 billion euros of R&D-budget and more than 14,000 scientists, we are a leading company in our respective areas. We develop products for unmet therapeutic areas and against crop diseases where there have been no prior solutions. Another important factor is, Bayer is an employer. Looking for long-term solutions, we develop our staff over time and provide long-term perspectives. All this is based on our values, which determine our partnerships with stakeholders on all levels. Can you tell us specifically your core area of business interest in Nigeria and how you think this will be of great benefit in improving lives in Nigeria? We are active in three areas. Our CropScience division offers a wide range of products (insecticides, herbicides and fungicides), plus seeds. Our experience of more than 100 years and the broad product portfolio enables us to provide tailor-made solutions to farmers. Those solutions help farmers to increase substantially their yields, to grow safe and healthy crops and to increase their revenues. The pharmaceutical branch includes new inventions that help to cure diseases that have been unmet in the past. This covers therapeutic areas like cardiovascular and oncology. Bayer is also a leading company in hormonal contraceptives enabling women in their family planning. Finally, our Consumer Health area includes products for affordable self-medication, e.g. painkillers, anti-allergies or vitamins for healthy and balanced nutrition. Your mission is to improve people’s lives and contribute to society - today and in the future. How do you intend to achieve this

Mohammed Jimoh

‘

Nigeria, in its move to become a major economic player, also deserves better and more innovative products instead of sticking with generics and staying behind. We hope that the government shares this view and values companies that are capable of providing innovation to the country

in Nigeria? Our corporate mission is Science for a Better Life. Bayer with its products helps to solve problems that are at the heart of society – health and food. Bringing our innovative and proven effective products to the Nigerian market will help people to live longer and healthier lives and enable Nigeria to become more self-sufficient in providing high-quality foods to a growing population. Beyond this, Bayer’s investment in Nigeria shows our long-term commitment by creating employment, developing and training our staff and by being a reliable partner to our stakeholders. Today, the Nigerian Government is very particular about improving and supporting agriculture. Apart from your products in the market, what other areas will your organisation be willing to support these government initiatives? Bayer is active in several

forms. Some of them are yet to come, such as our food-chain initiative. However, a concrete example where we are supporting farmers is the stewardship. This means that we train and inform farmers to better use crop protection products and beyond best-practice in agriculture in order to maximise yields and quality while reducing environmental impact at the same time. What does the Nigerian economy stand to gain from innovative companies like yours? Bayer brings the latest innovation to Nigeria in all our areas. In crop science, it improves Nigerian products and makes them more competitive compared to foreign producers, no matter if they are meant to be exported or have to compete against imported crops. In the HealthCare areas, it saves lives from diseases that have had no solutions in the past. To improve medical practice we conduct several trainings every month on our medicines

and their appropriate use to treat and prevent important diseases. In general, when using Bayer products, there is a traceability and guarantee of quality standards, which is not the case for most generics. Beyond this, Bayer brings in this expertise being an employer of choice and developing its staff with latest knowledge and development. Finally, Bayer is a partner in the communities where we work and live. As such, we deploy programmes in the context of our corporate social engagement. How involved is the German government in this investment in Nigeria? Germany and its institutions have always been a partner for us. They have provided a high degree of support when Bayer established the legal entity back in 2014. Since then we maintain close contact with them and they support us in our further development. There is a wide range of programmes that Bayer can make use of and that we decide to use when there are benefits in line with our strategy. Where do you see the industry in the next five years? With regard to the healthcare industry, we hope for a better regulation of the distribution of medicines, reducing the influx of counterfeit and unregulated products. We also hope that the government finds ways to establish a system of healthcare provision and reimbursement for all Nigerians. When it comes to the agrobusiness, the just mentioned topic of better regulation applies as well. It will be important that the governmental institutions and actors in the area of agro services support this development by further implementing a clear and transparent frame for regulations. We will certainly see a growing awareness for high quality seeds and crop protection products, as the farmers need to feed a fastgrowing population. Nigeria, in its move to become a major economic player, also deserves better and more innovative products instead of sticking with generics and staying behind. We hope that the government shares this view and values companies that are capable of providing innovation to the country.

‘

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How equipped are you as business traveller Pg 31

German ‘New Rush comes with value proposition’ Audi’s production hit by strike in Hungary

MIKE OCHONMA mikeochonma@gmail.com

ompetition is the saturating SUV segment is getting more exciting as Toyota Nigeria Limited (TNL) is responding swiftly to growing demand of individual and corporate fleet customers market with following the launch of the new generation Toyota Rush SUV (Sport Utility Vehicle) into the local market. The new Toyota Rush according to Kunle Ade-Ojo, managing director/chief executive of TNL is being introduced into the Nigerian market to fulfil customer yearnings for a Toyota SUV that would compete with the likes of Kia Sportage, Hyundai Tucson, Ford Escape and others in that category. Toyota Rush which is available in 1.5 automatic fabric mid grade, 1.5 automatic fabric high grade and 1.5 automatic leather high grades IN Toyota Nigeria dealer outlets acoross the country is easily identifiable for its bold yet fresh design language that never fails to make an impression. Besides the captivating exterior design and utility propositions, Rush not only offers great boot space but also grants impressive headroom and legroom, allowing occupants to take long journeys at ease. In addition, the impressive features like projector headlamps, dual-tone grille, LED taillights and more adds up to make the Rush a head turner. With its good visibility stance, the Rush is designed in such a way that it gives the driver a great view of the road ahead. An auto air conditioner is available to meet every demand in different areas and contribute to sufficient cooling/heating performance in every area. The rear cooler is mounted in the rear ceiling to provide a comfortable environment for all passengers. The automatic transmission developed for the 2NR-VE engine

has also realized excellent power performance and fuel efficiency, with the 1.5-litre engine ensures excellent fuel economy and efficiency in the vehicle. The third and fourth lock-up ranges have been expanded to achieve further reduction in fuel consumption. The brake is equipped with the ABS (Anti-lock Brake System) and VSC (Vehicle Stability Control) functions. In sudden braking situations, the maximum braking power is produced without locking tires. While the ABS system helps prevent a lateral slip of the vehicle, secure steerability, and maintain tire grip, the VSC system suppresses deflecting or spinning of the vehicle in cornering, or unstable behavior caused by a rapid change of road surface. The body structure features a high level of safety in the event of a side impact as well as a frontal impact, considering pedestrian protection.

Enough distance between high solid parts (e.g. engine) and hood panel is secured to keep a stroke required for energy absorption in order to protect heads of pedestrians (adult/child). The optimum shape of each part and use of foamed polystyrene protect legs of pedestrians from injury. According to the TNL managing director, ‘’Our teeming customers had continually yearned for a vehicle that would bridge the gap between the upper class SUVs and our salon category. A befitting vehicle imbued with the trappings of the Toyota Superior Quality and we responded with the Toyota Rush’’. Describing it as a beauty to behold, Kunle Ade-Ojo said it favourably competes within its chosen SUV segment on the platform of elegance, price and the enviable Toyota family heritage. A heritage built on trust and the will to continually satisfy customers and customer

safety which is paramount. He reiterated that, as a corporate and responsive organization Toyota (Nigeria) Limited will continually strive to yield to the aspirations of our dear customers by enriching our stables with magnificent vehicles, offering attractive variants and surpassing customer expectations. Reflecting on the impact of the economy, the TNL boss stated that, the inclement economic landscape of the country has not deterred the franchisee. Fusing dynamic energy with sharp elegant styling and fuseing dynamic energy with sharp elegant styling, it is targeted at aspirational individuals that love the comfort and status of an SUV with excellent drive and affordable price. The rich pedigree of the Rush model already imbues it with outstanding attributes peculiar only to all its siblings in the Toyota model line-up.

udi has shut down production at its Ingolstadt factory in Germany until after a strike at its Hungary plant led to lack of components such as engines. Support for a strike that last week shut Audi’s plant in Gyor, Hungary. Tibor Szimacsek, a spokesman for the AHFSZ union that called out all 9,000 of its members from the Gyor plant last Thursday in a dispute over pay, said the union’s ranks swelled by another 300 workers at the weekend. He added several rounds of negotiations had failed to bring the two sides closer to an agreement at the plant, which employs more than 13,000 people and is one of Audi’s largest factories.Audi builds the A3, TT coupe and Q3 SUV models in Gyor, according to the assembly plant map. On Monday, there was a gathering of about 4,500 workers at the plant, Szimacsek said, to give support to an unusually powerful show of labor strength in Hungary, where large strikes are uncommon. Audi spokeswoman Judit Mithay-Marko said the company continued to strive for an agreement and had submitted its seventh wage proposal at the weekend. Unions negotiators rejected that package on the spot. Audi has offered a total 20 percent wage increase for this year and next, but the union wants an immediate 18 percent increase,

Japan-based automakers 2018 market share up

apan-based auto manufacturers posted their fifth consecutive year of record Canadian lightvehicle sales in 2018, even as the industry overall saw a decline for the first time in nearly a decade. The Japan Automobile Manufacturers Association of Canada, which represents Honda, Mazda, Toyota and Nissan, among others, says sales rose nearly two per cent to 733,3i8 units last year, boosting market share to 36.9 per cent. Mitsubishi, Nissan, Subaru and Toyota all had record sales years. Total annual new-vehicle sales for the industry overall fell in Canada in 2018, when 2,003,506 vehicles sold. That total is down 1.9 per cent from 2017, according to the Automotive News Data Center in Detroit. Annual Canadian sales last fell in 2009 when they dropped 11 per cent over 2008 and at the height of the great recession. December

contributed to the lower 2018 total with 116,605 vehicles sold during the month, down 6.5 per cent from last December. “Despite challenges in the auto sector across North America, much of which can be traced to uncertainty over global trade, Canada-based Japanese-brand auto manufactur-

ers remain resilient,” Larry Hutchinson, chairman of JAMA Canada and president of Toyota Canada, said in a statement. Japanese-brand auto manufacturers’ Canadian production fell 7.1 per cent to 930,140 units in 2018, but their share of light-vehicle production in Canada increased to 46.5

per cent last year as total output in Canada declined to just under two million light vehicles. Softer demand for sedans in general, and the transition to building the next generation Toyota RAV4 in Woodstock contributed to the decline in Canadian production, the association said. Nearly 78 per cent of Japanese light-vehicle production in Canada was exported in 2018. In 2018, Japanese-brand automakers built close to 1.3 vehicles in Canada for every one sold. Japan-based automakers, including medium-duty truck maker Hino, operate five assembly plants in Ontario. “While Canada remains highly trade-dependent in a robust, rulesbased global trade system, it is also important for JAMA Canada members that our success continues to be a made-in-Canada story,” Hutchinson said.

and more down the line to give its workers greater parity with Audi’s Slovak employees, who the union says make 28 percent more, or its Polish staff, who earn 39 percent more. Audi’s Hungarian business contributes about 1.4 percent to the country’s gross domestic product, according to one local economist. Its $8.3 billion net revenue in 2017 was about 12 percent of Audi’s global intake, company data shows. Rival automakers like Daimler, Suzuki and General Motors also have units in Hungary, and BMW committed to building a large new factory last year.

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CFAO Motors re-introduces KingLong buses Hyundai plans voluntary buyouts as market slows

MIKE OCHONMA mikeochonma@gmail.com

The intra and intercity commercial passenger bus business got a boost recently following the re-introduction of King Long passenger bus and cargo bus valued at between N8 million and N9million into the Nigerian market by CFAO Motors. At a commercial re-introduction event held in Lagos, the automobile dealership company with presence in the country that run into decades delighted existing and potential customers, industry stakeholders and motoring journalists with some of the exciting features of the brand which has already been used and tested in the Nigerian market. Explaining reasons why the King Long 15-seater buses were not longer as popular as it used to be on Nigerian roads, Thomas Pelletier, managing director and chief executive of CFAO Motors said that, the company put the importation of the brand on hold on account of the cost of foreign exchange. According to him, ‘’Because of the cost of FX, at sometime, rates were so high that, they could not match market demand and the product or the brand itself would have lost its competitiveness, so we put importation on hold’’. During his presentation, Laurent Friederich, general manager of CFAO Equipment, a division of the multinational company saddled with the responsibility of distributing the King Long brand in Nigeria, , stated that his company known

L-R: Idris Siyaka, head of sales, CFAO Equipment; Uti Oghenevwogaga, MC/Comedian; Thomas Pelletier, managing director, CFAO Motors/Country Delegate, CFAO Group Nigeria; Stanley Ailuelohia, sales manager, CFAO Equipment,and

for distributing only quality products, settled for King Long because of its salient features. According to Friederich, “CFAO has a solid reputation in Nigeria, and we are distributing the King Long brand because it is a leading Chinese brand in the bus segment”. He added that the company’s strategy is to ensure nationwide distribution of the bus through “our network because we have a solid sales and aftersales network across the country”. On the outstanding features of the brand, the general manager explained that aside the pocket friendly price, the bus is durable and fuel-efficient, coming with a low maintenance cost, just as it uses the simple technology. The CFAO said the bus can be used for a wide variety of purposes such as city and inter-city transportation, school bus, it is ideal for church and mosque shuttles,

for companies in the Fast Moving Consumer Goods (FMCGs) businesses, cargo distribution bus and as an ambulance etc. He added that there are plans to study local assembly of the buses in the nearest future. The Kingwin-15 Seater bus which is ideal for modern day passenger transportation comes with a 2.237 litre engine on a long wheel base, 5-speed transmission and safety features such as Anti-Locking Braking System, stop lamp, seat belts on all seats, and appropriate braking system. Its functional equipment include front fog lamp, rear view mirror, rear stepped bumper, speed limit device, among others. It also comes with a petrol engine, CD+MP3 player, and front and rear air conditioning system among others. On the other hand, the Kingwin Cargovan also comes on a long wheel base with a high mount stop lamp, tyre size of 195/70/R15, 2.237

litre engine, and other standard features applicable to the 15 seater bus. It also comes with a generous 7.6 cubic meter space. With the relaunch, the King Long buses are now available for purchase in all CFAO Motors outlets nationwide and it is offered on a warranty of two years or 60,000 kilometers which ever comes first. A satisfied customer, the proprietor of Troika schools, Lekki, Lagos, Erinma Kanno, as well as a King Long dealer, Adeleke Samuel affirmed the outstanding features of the King Long buses during the event. CFAO, founded in 1887, and present in Nigeria since 1920, has been known for its commitment to customer service, dynamism, efficiency boosted by strong local presence as well as a trusted network, while King Long is a leading Chinese bus manufacturer with strong ties to international auto parts suppliers.

Toyota, Mazda subcompact partnership look to Yaris

t seems that Toyota and Mazda’s partnership on subcompacts is expanding to include the hatchback version of the Yaris. The old Toyota-built Yaris hatchback is going away for the 2019 model year and a new hatchback model is coming for 2020, according to Toyota spokesperson Nancy Hubbell. This means that, the new Yaris hatchback will be a rebadged Mazda 2, like the current Yaris sedan that Mazda builds for Toyota in Mexico. The new Mazda-based Yaris hatchback is likely to use the same 1.5-liter inlinefour engine as the sedan, paired with either a sixspeed manual or six-speed

automatic transmission. The new Yaris hatch should also share the Yaris sedan’s revised front-end styling while keeping the Mazda 2 hatchback’s bodywork mostly unchanged otherwise. Toyota and Mazda originally teamed up to create the Scion iA, a rebadged version of the Mazda 2 se-

dan that debuted as a 2016 model. When the Scion brand was shuttered, the iA was renamed to become the Toyota Yaris iA, which was sold alongside the outgoing Yaris hatchback, itself built by Toyota in France. For 2019, Toyota dropped the iA from the Mazda-based Yaris’s name to create the

2019 Yaris sedan. The complex lineage of Toyota’s subcompact lineup will finally be simplified when the new Yaris hatchback arrives, as both versions of the Yaris sold in the United States will soon be rebadged Mazdas. Toyota’s global plans for the Yaris are unclear at this point.

s China’s car industry loses its shine, automakers are starting to buckle up for the downward slope with Hyundai Motor Co. announcing it’s letting workers go and is reviewing production plans in the world’s biggest market. Beijing Hyundai Motor Co., the joint venture between Hyundai and BAIC Motor Corp., is accepting voluntary retirements from employees and reviewing “production optimization” to enhance plant efficiency around the Chinese New Year holidays, Hyundai said. Once hailed as the growth engine for the world’s car industry, China’s light-vehicle market last year had its first annual decline in more than two decades as consumers balk at new purchases amid a trade war with the U.S. and a slump

in the local stock market. That’s a setback for global automakers already wrestling with cooling sales in the U.S. and Europe, prompting Detroit carmakers to close factories, cut shifts and lay off thousands of workers. Suzuki Motor Corp., the Japanese manufacturer known for minicars, pulled out of China last year as drivers’ tastes shifted to SUVs, crossovers and larger sedans. Luxury brand Jaguar Land Rover had to shutter production for two weeks due to sluggish demand in China. Hyundai, the world’s fifthlargest automaker together with affiliate Kia Motors Corp., has suffered more than many other global automakers in China in recent years. In 2017, Chinese consumers boycotted its products amid geopolitical tensions with South Korea.

FGCM put spotlight on community service and upliftment

ord employees and dealers across Sub-Saharan Africa put the spotlight on community service and upliftment during 2018 by volunteering their time and efforts to support a wide range of projects as part of Ford’s annual Global Caring Month. A total of 25 projects were conducted across the region with thousands of man hours dedicated to improving lives and assisting impoverished communities in South Africa, Ethiopia, Madagascar, Mozambique and Uganda. “Ford Global Caring Month is our flagship community initiative each year, and it was fantastic to witness the exceptional level of energy and enthusiasm from our employees, dealers and distributors that went into the 2018 projects,” said Neale Hill, managing director of Ford Motor Company Sub-Saharan Africa Region. “With our primary focus on supporting environmental, agricultural, clean water, educational and welfare needs, our Ford volunteers played an important role in uplifting and improving the lives of people in the communities in which we operate. This was achieved in a meaningful and sustainable manner, whether it was painting and equipping

classrooms to help educate learners, or creating vegetable gardens to provide additional food security.” Education was the main focus of many of the projects completed in South Africa, with employees from the Silverton Assembly Plant in Pretoria and the Struandale Engine Plant in Port Elizabeth dedicating their time to improve crèches, early learning centres, schools and skills development facilities in impoverished communities. This was bolstered by the creation of vegetable gardens and the repair of hydroponic tunnels for schools and community feeding schemes, as well as the construction of recycling facilities and conducting environmental cleanup and education campaigns. Ford dealers in South Africa also played their part, with Barloworld Ford in Tygervalley, Cape Town, painting and decorating shipping containers that are used as clinics and classrooms, as well as developing gardens around the facility. Ritchie Auto in Richards Bay set out to refurbish the local Autism Treatment Centre, and also set up a fully equipped computer learning centre.

Wednesday 30 January 2019

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BUSINESS DAY

MTravel odern

How equipped are you as business traveller MIKE OCHONMA

mikeochonma@gmail.com

etting set for a regular traveller can be very stressful and somewhat excruciating in terms of the basic items to carry along. Most times, the travellers forget some of the basic things to carry along and for any business traveller, there should be basic items that must be carried to make the trip worth the troubles. If you’re a business traveller yourself, why not treat yourself to something that will make life on the road easier in 2019 and beyond. Cable organiser: rather than stuffing your laptop’s power-cables, chargers for your devices, and headphones, you can arrange them in neat, protective bags available in a range of sizes and designs. The more compact ones will hold your tablet or smartphone too. Palm-sized projectors let you share presentations without having to carry heavier devices or worse, hope that the one at the presentation venue works. Many have built-in speakers and several hours of battery life. The RIF6 Cube for example is two inches square and weighs just ounces, slipping neatly into even modest laptop bags. Slightly bigger is the Optoma 750ST, which projects a 50-inch image from just 36 inches away. Its LED light source means no bulbs blowing at crucial moments. Compact keyboards : while laptops are lighter and slimmer than ever, some

BA introduces electric cab service at Heathrow

business travellers opt to downsize even further, carrying a tablet that’s not much bigger than a smartphone. This can be paired by Bluetooth with a detachable keyboard and mouse, giving you full functionality. Smaller keyboards, made of silicone, can be rolled up and packed away, and enable typing on your smartphone. Headphones: indispensable for workers or students with talkative peers, or just lovers of music, movies and audiobooks, headphones are also a way to focus the mind. You might choose to work

while listening to a noise generator that plays ocean waves, coffee-shop ambience or rain on a tent, or to binaural beats that enable creativity and focus. Noise generators and binaural beats can also aid sleep, which can be especially useful in hotel rooms with noisy traffic, air-conditioning or guests. Powerbanks provide backup for electronic devices, especially those with bigger screens that gobble up battery-life. Shop around though, advises Weir, as some of the smaller ones simply aren’t worth the

money. Products offering a combination of battery pack, surge protector and charger are a good investment, and models like the Tripp Lite Traveler3 USB and the Belkin Travel Rockstar have proved popular with business travellers. Smart luggage: the Pluggage range of smart suitcases by Delseyhav fingerprint ID to lock and unlock, interior lighting and speakers and USB chargers for your devices. It weighs itself and its GPS tracking tells you exactly where it is in the airport or aboard your flight.

Boeing tests autonomous passenger air vehicle

oeing has successfully completed the first test flight of its autonomous passenger air vehicle prototype in Manassas, Virginia. Boeing NeXt, which leads the company’s urban air mobility efforts, utilised Boeing subsidiary Aurora Flight Sciences to design and develop the electric vertical take-off and landing aircraft and will continue testing to advance the safety and reliability of on-demand autonomous air transportation. The prototype completed a controlled take-off, hover and landing during the flight, which tested the vehicle’s autonomous func-

tions and ground control systems. Future flights will test forward, wing-borne flight, as well as the transition phase between vertical and forward-flight modes. This transition phase is typically

the most significant engineering challenge for any high-speed VTOL aircraft. “In one year, we have progressed from a conceptual design to a flying prototype,” said Boeing chief technology officer,

Greg Hyslop. “Boeing ’s expertise and innovation have been critical in developing aviation as the world’s safest and most efficient form of transportation, and we will continue to lead with a safe, innovative and responsible approach to new mobility solutions.” Powered by an electric propulsion system, the prototype is designed for fully autonomous flight from take-off to landing, with a range of up to 50 miles. Measuring 30 feet long and 28 feet wide, its advanced airframe integrates the propulsion and wing systems to achieve efficient hover and forward flight.

ritish Airways (BA) has introduced a brandnew electric cab service at its Heathrow home, giving customers the opportunity to experience travelling in a legendary London taxi without leaving the airport. The London Electric Vehicle Company taxi features Wi-Fi, phone, laptop and USB charging and a panoramic roof - great for plane spotting. In addition, customers can expect a smooth ride, air-conditioning and a spacious cabin with room for all of customers’ hand luggage. The taxis will join British Airways’ fleet of chauffeurdriven executive vehicles, to drive premium customers at risk of missing their connecting flight to meet their next aircraft. Customers are met by the driver at the aircraft side and are driven directly to the aircraft side of their onward flight. With every ride completely free of

charge, there’s no need for customers to reach for their wallets. Daljit Hayre, British Airways senior manager, Heathrow Customer Experience, said: “It’s great to see the reaction of customers when they’re met by a London taxi at the side of the aircraft, waiting to take them on to their next flight. “They’ve told us how much they appreciate this gesture, plus they love the space in the vehicle for their hand baggage. We’re also really pleased that using new generation electric taxi reduces our carbon footprint.” The initiative is part of British Airways’ long-term plan to reduce emissions from all vehicles at Heathrow and follows the introduction of electric aircraft pushback vehicles. The airline is investing £6.5 billion for customers over the next five years, including new aircraft, new cabins, new catering, new lounges, Wi-Fi, and new routes.

Cayman Islands welcomes strong visitor figures for 2018

ollowing a rebound year for Caribbean travel with increased competition throughout the region, the Cayman Islands has maintained its market share with another year of recordbreaking statistical arrivals. At the close of 2018, total visitation surpassed all previous years of recorded visitation including 2006, which previously held the record for the highest number of total visitors in a calendar year. Total arrivals for 2018 in both air and cruise visitation was 2,384,058, which is an 11 per cent increase over the same period in 2017 (237,211 additional persons). This significant increase in visitation positively impacted the local economy with an uptick in visitor spend, increasing by $98 million over 2017. The estimated total

visitor spend in 2018 was $880 million, an increase of 12.5 per cent. Cayman Islands minister of tourism, Moses Kirkconnell, shared: “The mandate of the ministry and department of tourism is to facilitate annual growth in visitation and economic contribution; my ministry pursues this strategically each year. “Through creative promotions, partnerships, and continued collaboration with our industry stakeholders, we have maintained the significant accomplishment of continuous record-breaking years. “Our government has committed to investment in our points of entry at the cruise port and airports. These much-needed upgrades will benefit of tourism operators, businesses, visitors and residents.”

32 BUSINESS DAY Financial Inclusion www.businessday.ng

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& INNOVATION

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Wednesday 30 January 2019

Supported by:

After N12bn, Tradermoni may fail to spur financial inclusion Endurance Okafor

if it works well for different cohorts of people, it will become contagious.” Meanwhile, the central bank of Nigeria has target to include 80 percent of the country’s adult population into the financial cycle by the year 2020. Some of the challenges that drag the country’s inclusion rate include but not limited to; lack of incentive to open a basic account due to high cost of maintenance, low income and purchasing power, high illiteracy rate especially in the northern part of the country and proximity of financial service providers to some rural dwellers. “You cannot achieve financial inclusion via marketing campaigns or market storms, asking people to open bank accounts. You have to give them a strong incentive to do so, and to continue to operate the account. GEEP has been able to achieve this. I call it the convening power of capital,” Nwagba explained. Another trader who got her Tradermoni loan from an agent at Ketu market responded on the condition of anonymity for the fear that she may not get any future loan disbursement if she is quoted mentioned that “it was an agent that helped me get my money, I was not told anything about a bank account, but they said there is mobile wallet.” When BusinessDay asked

her if she will continue using the mobile wallet through which she got the loan, she said no, this is because “I don’t know anything about the mobile wallet, I have never used it before and no one showed me anything, all I just wanted was to get my money.” Nwagba told BusinessDay in a recent interview in Lagos that GEEP removes the first critical barrier to financial inclusion, which is the barrier of engagement. “We give you a strong reason to want to try. You can only get our loans by opening a bank account or operating a mobile wallet. You can only repay via the bank or vouchers, no cash. You can only access the next one on your mobile phone. We combine this with increasing investment in communication and education,” he said. Meanwhile, Akeredolu said she has no plans to repay her loan as it is her own share of the Nigeria national cake, “I have never gotten anything from the government, I am hopeful that they will bring another one.” This was the same opin-

ion of Iya Sikiru as she said she prayed for a day like the day she got the N10,000 and “I will continue to pray to God to send another person that will give us small loan.” The story was however different for a trader at Ojuwoye market, as extortion and other corrupt practices in the process of obtaining the Tradermoni loan cut her off from receiving it. Owing to their lack of account holdings with banks, some were forced to strike a 50/50 deal with agents to receive N5, 000 while others had to consent to a 70 to 30, 90 to 10 and worse of all 95 to 5 sharing formula Enumerated in September 2018, Muyinat Ajibulu received a message congratulating her that her loan was ready for collection around 3:17pm on October 11 from Aku, a mobile money outlet assigned to manage the disbursement process of the loan. In the message were instructions on how to get the N10,000. But shockingly, she received another message notifying her of fund transfer to a strange account two hours later and that was the last she

seller sees credit ‘ Ifshea pepper needs, shouldn’t she

access it while it is available

‘

radermoni, a federal government initiative aimed at supporting petty traders across Nigeria may fall short of its secondary target to reduce financial exclusion. The federal government initiative which has disbursed more than N12 billion in loans to a total of 1.2 million people may have so far not contributed to reducing the 36.6 million Nigerians who are financially excluded. Investigation by BusinessDay across four markets in Mushin, Ketu, Abule-Egba and Ikotun revealed that the beneficiaries of the loans had no intention to operate their bank accounts after they withdrew the N10,000 deposits. Popularly known as Iya Sikiru, a trader at Mushin market who sells orange, mango, plantain, water melon, pineapple, etc, depending on the season when the various items are harvested, while commenting on her future plans for the account opened to collect the Tradermoni loan said “I will go and continue using the account when government put another money there for me.” This was affirmed by Bose Akeredolu, a fish seller at Ikotun market as she said “what will I go and do at the bank, there is always a lot of form to fill and I am not educated, plus bank will not give me loan but my meeting people will give me.” Meanwhile, Uzoma Nwagba, the Chief Operating Officer of GEEP in an interview with BusinessDay said they are quite pleased with the results so far. “Over half of our 1.5 million beneficiaries are firsttime operators of bank accounts or mobile wallets. And we see them use those tools even after the loans, and this encourages us. We are committed to targeting everybody who is not financially included,” Nwagba mentioned. He explained also that they admit it is going to be a long journey to bring Nigerians and micro-enterprises that are financially excluded or under-included into the financial space, “however, we are also conscious it is an ecosystem so we don’t need to interact with everybody;

saw of the loan. “Others have received the money and are rejoicing. I want to rejoice as well. With it, I can buy a bag of salt at N3500 and gain almost N2, 000 from it. I don’t plan to return any money. I may when I get the next one,” she explained. Nwagba, the COO of GEEP said that they are aware of those instances and are taking the necessary actions “with a programme of this scale, targeting a segment of the population that is highly uneducated, we know that some people would try to exploit the process and take advantage of unsuspecting beneficiaries.” He further explained that “we have even seen instances of people who do not work for the programme, walking into a market with mobile phone tablets and posing as TraderMoni agents. They charge N200 per person who comes to have their data and picture “captured,” whereas this is all just a show.” Non-collateralised loan is what the government says it is but on the market streets of Mushin, Ketu, Abule-Egba and Ikotun among others, the common impression is that the money is free and synonymous with the “stomach infrastructure concept”. During BusinessDay visit to Abule-Egba market, some beneficiaries in the market said the Tradermoni loan was not disbursed to them

through bank account neither through the use of mobile wallet rather it was given to them by some agent in an envelope. Although, every effort to get further details from the traders was abortive as they sensed it was an investigation and feared been implicated. There have been rumours that the timing of the loan disbursement shows it is vote buying money as against the claimed objective. Nwagba however explained that GEEP programme has a strict governance structure which emanates from the Federal Government through the office of the Vice President and according to him the money is placed in the Bank of Industry (BOI) which has been asked to execute the program. “There are signed agreements between the Federal Government and BOI on how the funds will be used, and how the usage must be reported. Moreover, for those who still push the vote-buying narrative, I always ask: is GEEP (either MarketMoni, FarmerMoni, or TraderMoni) a wrong programme? In other words, is it impacting millions of Nigerians or not? If it is, then why would there be a wrong time to do the right thing? If a pepper seller sees credit she needs, shouldn’t she access it while it is available?” Nwagba asked. Out of the 2 million people targeted by the year end, Laolu Akande, the spokesman to the Vice- president said about 500, 000 people have been paid, with almost 200,000 bank accounts opened during the course of the programme. He debunked the widespread account that the fund is neither a product of Abacha loot nor a strategy for inducing political sympathy towards President Buhari in the 2019 elections. “The specific Abacha loot is $322 million that was returned from Swiss government to us. But this is targeted at conditional cash transfer. The social intervention of the Buhari administration has four categories and there is the conditional cash transfer where we pay N5,000 per month to the most vulnerable and poorest among us,” he said.

Wednesday 30 January 2019

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Wednesday 30 January 2019

FOR THE RECORD

‘Constitutional breaches under the watch of President Muhammadu Buhari’ A letter by HE Atiku Abubakar to the Ambassadors of France, Germany, EU, US, and UK High Commissioner. Dear Your Excellency,

have chosen to write this letter to Your Excellency for the enviable role that your country plays as champion of Democracy and the Rule of Law. I am also writing you as Nigeria’s international development partner working together to deepen and strengthen our democracy as well as to help in the transformation of our economies and societies for the better. President Muhammadu Buhari is threatening our democracy by serially breaching the provisions of our constitution and undermining organs and institutions of State in order to advance his personal interest. While the President has ironically taken oath to safeguard and defend the Constitution of the Federal Republic of Nigeria, the reality of his selective and wanton violations of its provisions means that his oath is observed only in the breach. And as Your Excellency very much knows, respect for the rule of law is integral to promoting and preserving the values and principles of democracy. Sadly, however, by the actions of the government of President Muhammadu Buhari, one is forced to think otherwise. As a Presidential Candidate in the forthcoming General Elections that will be conducted and supervised by the Government of President Muhammadu Buhari, I feel the urgent need to share with you some of these key violations of the provisions of our constitution and to demand that you pile pressure on the Federal Government to desist from these violations and ensure a level playing field for the General Elections that are only a couple of weeks away. We acknowledge with profound appreciation the positions taken by some members of the International Community in Nigeria and urge Your Excellency to add your country’s very strong voice against these breaches of Nigeria’s constitution. Your Voice is very important to the survival of Nigeria’s democracy. Some of these constitutional infractions are highlighted below for your information and action as you may deem appropriate. 1. The purported suspension of CJN Onnoghen On Friday, January 25, 2019, our nation woke up to the shocking news of the unilateral and extra-constitutional suspension of the Chief Justice of Nigeria, Justice Walter Onnoghen and the immediate appointment and swearing in of Justice Ibrahim Tanko Muhammad, as the new acting Chief Justice of Nigeria (CJN). This action of President Muhammadu Buhari, not only breaches the Nigerian Constitution,

Atiku Abubakar

but has also managed to undermine Presidential democracy by assaulting one of its hallowed doctrines of separation of Powers. For the records, Justice Walter Onnoghen is the head of one of the Tripartite but mutually independent organs that form the government of the Federal Republic of Nigeria. To attempt to muscle out the Chief Justice of Nigeria using phony charges at a time when His Lordship was primed to play a central role in the fast approaching nationwide electoral process represents the boldest steps in the march to undermine our democracy. This is undoubtedly an anti-democratic act which my political Party and I reject without reservation and for which I urge Your Excellency to condemn unequivocally. Need I say, this brazen authoritarian and imperious stride of President Buhari is the latest action in a series of carefully planned onslaught on our nation’s hard earned democracy by an extremely power hungry and anxious President and the cabal that feeds fat around him as February 16, 2019 draws nearer. The fact that the unlawful suspension of Chief Justice Walter Onnoghen was announced just as it became public knowledge that the CJN was constituting the election petition tribunals is not lost on discerning Nigerians and the international community. This act of desperation is geared towards affecting the outcome of the 2019 Presidential elections. Indeed, it is not just the CJN that has been “suspended”, it is the Nigerian Constitution that has been infracted and, in effect, suspended, under the guise of the suspension of the CJN.

The case involving the legality or otherwise of the charges against Chief Justice Walter Onnoghen is in court, as it should be. So far, the judiciary has ruled in Justice Onnoghen’s favour. So, why not allow the court to adjudicate on the matter? What is the pressing urgency about this matter? Let me therefore take the opportunity of this letter to urge your country and all well-meaning members of the International community to mount pressure on this government and all its anti-democracy functionaries know that their actions will have consequences. Strong consequences. 2. The illegal purchase of the Tucano Aircraft: President Buhari sometime in April 2018 approved the purchase of Tucano Aircrafts for the Nigerian Military at the sum of $496 million (Four Hundred and Ninety-Six Million United States Dollars). This, he did, without seeking prior approval of the National Assembly contrary to Section 80 (3) and (4) of the 1999 Constitution (as amended) which states very clearly, how the President can spend monies belonging to the Federation. It provides: “(3) No money shall be withdrawn from the Consolidated Revenue Fund or any other public fund of the Federation, except in the manner prescribed by the National Assembly.” “(4) No monies shall be withdrawn from the Consolidated Revenue Fund or any other public fund of the Federation, except in the manner prescribed by the National Assembly” 3. Disregard for Orders of Courts:

The Muhammadu Buhari administration has serially violated court orders, going against the rule of law especially in three known cases. a. Col. Sambo Dasuki (Former National Security Adviser): Various courts have granted Col. Dasuki bail on at least six different occasions; the Buhari led government has persistently refused to comply with the court orders. • Federal High Court in Abuja presided by Justice Adeniyi Ademola in 2015 ordered the release of Col. Dasuki’s passport and granted him permission to travel abroad for three weeks on medical grounds. Despite the order made on November 3, the Department of State Security Services, SSS refused to release Col. Dasuki. • Again, the former NSA and four others were granted bail on December 18, 2015 on a similar condition with a N250 million bond by Justice Hussein-Baba Yusuf. • Similarly, the former NSA; a former Minister of State for Finance, Bashir Yuguda; former Sokoto Governor, Attahiru Bafarawa; and three others were granted bail by Justice Peter Affen on December 21, 2015 by the Federal Capital Territory High Court in the sum of N250 million each and two sureties in like sum. The Federal Government cherrypicked the order whilst disobeying the part that concerned the former NSA. • The ECOWAS Court presided by Honorable Justice F.C. Nwoke on October 4 2016 granted the former NSA bail and ordered the Nigerian Government to pay N15 Million to the defendant as damages for his “illegal and arbitrary detention”. • On 17 January 2018, a Federal High Court sitting in Abuja reaffirmed previous court orders granting Col. Dasuki bail. • Also on April 6, 2018 the Abuja Division of the Federal High Court affirmed, for the umpteenth time, its decision for the release of Col. Dasuki. b. Ibraheem El-Zakzaky, leader of a Shiite Group, IMN: • Sheikh El-Zakzaky has been in detention without trial for over 3years after his followers were massacred in broad daylight; his wife and family killed and his home burnt, in a gory and shameful show of brute force by the Nigerian Army. This particular state violence is nothing short of genocide. • On December 2, 2016 the Abuja Division of the Federal High Court Presided by Justice Kolawole ordered the release of Sheikh ElZakzaky and berated the Nigerian government for violating his rights. 4. The approval of $1 billion for military expenditure before approaching the National Assembly:

The Niger ian government through the National Economic Council NEC, again in contravention of Section 80 (3) and (4) of the 1999 Constitution (as amended), granted approval for the release of $1 billion from the Excess Crude Account, ECA, for the procurement of military hardware and other equipment to fight insecurity in the country, ahead of the 2019 General Elections without recourse to the National Assembly. Mansur Dan-Ali, Nigeria’s Defense Minister disclosed this at the end of security chiefs meeting with President Muhammadu Buhari at the Presidential Villa, Abuja, on Wednesday, April 4, 2018. By this act, the Federal Government acted contrary to the provisions of the Section 80 (3) and (4) of the 1999 Constitution, which states: “(3) No monies shall be withdrawn from any public fund of the Federation, other than the Consolidated Revenue Fund of the Federation, unless the issue of those moneys has been authorized by an Act of the National Assembly. 5. Executive Order No. 006 (On Preservation of Suspicious Assets and Related Schedules): The enactment of the controversial Executive Order No. 006 as an Executive legislation which permits security agencies to freeze the assets of persons standing trial or undergoing investigation without recourse to court orders. This is a usurpation of legislative and judicial powers of the National Assembly and the judiciary as enshrined respectively under sections 4 and 6 of the Constitution of the Federal Republic of Nigeria and reminiscent of the military era of decrees. The above, and many more that did not make it into this very short letter, are the unfortunate actions of the Government of a man who merely pays lip service to being a reformed democrat. General Elections are upon us yet again. I urge you to partner with Nigerians to defend our constitution and play an active role in building our country. The choices facing all of us is either to stand aside and watch Nigerians reelect a President who has been in constant violation of the laws of the land without remorse; or to support them show him the way out and elect a true democrat. We must send a clear message that the Nigerian Nation is bigger than any individual. Even if Nigerians opted not to elect me as President, the incumbent must go into the polls on his own record of lack of respect for the Rule of Law and not on the spurious perception of his “Integrity”. We need to set precedence for successive leaders not to take democratic mandate for granted.

Wednesday 30 January 2019

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BUSINESS DAY

INSIGHT

Lest we forget amcon’s role as saviour of ailing businesses

am bold to say the future of Nigeria is bright. Our current dispensation of democracy is under 30, but we are building institutions that are at par with those built by democracies that boast of centuries of experience with similar democratic institutions. One is tempted to question why older democracies, for that matter, tend to expect much from us, despite our fledgling democracy and budding experience at institution-building. But the high expectation is the more reason why we should pat ourselves on the back for what we were able to achieve in few recent years. Nowhere are such strides being recorded in superb ways than in our financial sector of the economy. And within the financial sector our ability to transform innovative ideas into formidable building blocks of accountable institutions is unparalled. Reference is here made of a financial idea we toyed with 10 years ago; an idea that our leaders and financial gurus thought would restore stability in our financial system during crises times and beyond and at the same time hold our financial institution drivers accountable. It is an idea that, by extension, seeks to breed the culture of transparency in the system, thus accentuating the desired confidence in our financial institutions by depositors and investors at home and from abroad. It is the idea of Asset Management Corporation of Nigeria (AMCON). Ten years ago Nigeria introduced AMCON, following the global financial meltdown of 2008, as an innovative idea of fortifying our financial institutions. One of the areas focused was the banking sector. Today, Nigerians are happier with the idea, as it has indeed stabilized the financial system and rescued them from systemic failures. It has ensured our depositors do not lose their hard earned savings; or their investors their investments. Socially the idea has saved thousands of jobs that would have otherwise been lost in the financial meltdown that affected the banks. AMCON may have some shortcomings, but that is expected of any new idea being experimented. But as AMCON grows in experience, such shortcomings are being addressed with perfect

hands of a master craftsman. Before the advent of AMCON, accountability in the banking sector, particularly during crisis, was something else. Who will forget how Chief Executives and their boards have more often than not failed to undertake stringent investigations to determine whether there was negligence on their part that led to the collapse of the banks they were managing? At one time the collapse of banks became crooked ways of self-enrichment by the management cadre because there was no regime of accountability, while the system of oversight was weak and the framework for the regulation of their operations was equally weak. Under those circumstances, in those years, the victims were the trio of investors, depositors and workers. They looked on helplessly as their hard-earned savings disappeared in thin air while bank managers and their pampered borrowers were sighted again and again enjoying their ill-gotten riches. AMCON came and put an end to all that impunity. Three functions have come to define AMCON’s role, namely: financial stabilization of the system, takeover and debt recovery. Technically, AMCON’s objectives include assisting eligible financial institutions to efficiently dispose of eligible bank assets; efficiently manage and dispose of eligible bank assets acquired by it (AMCON); and obtain the best achievable financial returns on eligible bank assets or other

‘

No one should lose sight of the fact that AMCON acquires the Non-Performing Loans (NPL) of the banks using tax payers money; so it is in the national interest that it recovers these loans from the debtors and to do so in order to return a profit on its purchase

‘

Bashir Ibrahim Hassan

Ahmed Lawan Kuru, managing director/chief executive officer, AMCON

assets acquired by it. Let’s take these messianic role of AMCON in more detail to better appreciate the good work the institution is doing for the nation’s economic development efforts under the able leadership of Malam Ahmed Kuru, a thorough-bred banker that knows his onions, its CEO. In this position, Kuru is leading a powerful team of professional to deliver on the mandate of AMCON. In just few years into its existence AMCON acquired about 13,774 Non-Performing Loans (NPLs) worth N3.6 trillion from 22 commercial banks to save them from outright collapse. Its provision of financial accommodation of N2.2billion protected about N4.7trillion of depositors’ funds and interbank takings; as well as saved approximately 14,000 jobs. Although the banking sector has received much of AMCON’s attention, one of the most celebrated takeovers by AMCON to date was that of Arik Air in 2017 in a fashion similar to how big banks considered “too big to fail” were saved by Government bailout in the US and Europe following the subprime loans bust of 2008, Nigeria’s biggest national carrier, Arik Air, was forced into receivership because it was considered too costly to allow it to fail with a whopping N300

billion debt overhang. Like other similar interventions by AMCON, especially in the banking sector, the Arik takeover was aimed at instilling sanity in the country’s aviation sector to prevent a major catastrophe. Before Arik, AMCON intervened to save Aero, another airline on the verge of total collapse, with greater relief to the aviation industry. Debt recovery is another function that defines the role of AMCON. I once argued that the portrayal of debt collectors as reprehensible villains out to wreck the life of a struggling debtor—individual or a business concern—belong to the past. My reason is that over the years there has developed a body of laws to ensure fair dealings in debt collection in Nigeria and globally. In discharging its mandate as poor these laws, disgruntled debtors have the tendency of portraying AMCON as villain in its effort to recovery its debt. I am aware that before a statutory body in the league of Asset Management Corporation of Nigeria (AMCON) is seen in open dispute with a debtor, it would have exhausted all options for amicable settlement of issues. This aside, if truth must be told, no company or individual is forced to borrow money in the first place. Ultimately, if com-

panies owe a debt, it’s because they chose to borrow money. Their lenders made that loan, or offered the credit line, contingent upon a documented pledge to pay it back. This means creditors do have a right to their money, and a debt collector is simply trying to reclaim what is legally and ethically owed by the debtor. The debtors AMCON is dealing with are those that have passed through all the three stages of normal debt recovery process. They have failed to settle their debts with their initial creditor’s internal collectors (bank loan recovery teams) referred to as first-party agency, which is the first stage in the process. The second stage is when a third party is introduced playing the role of debt collector. The third stage is for the original creditor to write off the debt and sells it, which is where AMCON comes in. No one should lose sight of the fact that AMCON acquires the Non-Performing Loans (NPL) of the banks using tax payers money; so it is in the national interest that it recovers these loans from the debtors and to do so in order to return a profit on its purchase. To do otherwise is to short-change toiling Nigerian tax payers. This is the more reason AMCON collaborates with some firms that qualified as its Asset Management Partners (AMPs). The AMPs are consortiums with specialist skills required to ensure recovery and debt resolution; banking, legal, valuation and accounting. The move is AMCON’s strategy to resolve its over six thousand accounts with loan balances of N100million and below. Surely, in the last 10 years or so AMCON has played a savior role on multiple levels with regards to our financial system. It has saved our financial system from systemic collapse through bail out, bridge banking and outright takeover. It has saved strategic companies in different sectors of the economy from outright collapse and, in the process, saved thousands of jobs of Nigerian family heads who otherwise would have been thrown into unemployment. But, above all it has saved depositors and restored confidence of investors in our banking and financial institutions. Accountability has finally supplanted impunity. Hassan, a financial analyst, writes from Abuja

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2019: INEC to engage 8,000 ad-hoc staff …Reaffirms readiness to conduct free, fair elections day that the 8,000 adhoc staff will include members of the National Youths Service Corps (NYSC), the corps members according to him, would complement the effort of its officials across the country. Mahmood, who was speaking through his Chief Press Secretary, Rotimi Oyekanmi, said that the commission decided to recruit more personnels because the number of NYSC members across the country where insufficient for the general elections. “The estimated adhoc staff would be around 8,000 across the country and they would include the NYSC members,” Oyekanmi said. According to him, “You would agree with me that if we have enough NYSC members we would not need to go and recruit people for the elections. How many graduates are the universities turning out?

Iniobong Iwok

head of the forthcoming general election, the Independent National Electoral Commission (INEC) has said it would recruit about 80, 000 adhoc staff across the country. Nigeria’s general election would begin on February 16th with the presidential and National Assembly elections, while the gubernatorial and state House of Assembly elections have been scheduled to hold on Saturday, March 2nd. INEC recently disclosed that about 84 million voters had been registered across the three geo-political regions zones in the country to take part in the general elections. The commission’s chairman, Yakubu Mahmood disclosed in an interview with BusinessDay, Tues-

Yakubu Mahmood

Onnoghen: Agbakoba petitions NBA, calls for disciplinary action against CCT chairman Iniobong Iwok

lisa Agbakoba, a human rights lawyer, has petitioned the Nigerian Bar Association (NBA), legal practitioners disciplinary committee, seeking disciplinary actions against the Chairman of the Code of Conduct Tribunal (CCT), Danladi Umar. Agbakoba, in a petition, a copy of which was sent to the BusinessDay Tuesday, berated the CCT chairman for assuming jurisdiction in the trial of the Justice Walter Onnoghen even while aware of the procedure and sections of the law in such a matter. He added that the decision of the CCT chairman to exercise jurisdiction on the matter was an embarrassment to the legal profession and had created a constitutional crisis in the country. “On January 14th, 2019, the Code of Conduct Tribunal (CCT) of which Danladi Umar is chairman assumed jurisdiction in a matter against the

Chief Justice of Nigeria, Honourable Justice Walter Samuel Nkanu Onnoghen, knowing that the CCT had no jurisdiction in view of CCT’s own decision in the case of Hon Justice Sylvester Ngwuta which also involved Asset Declaration. “It is only after the NJC has entertained and made a finding or pronouncement on the allegation against a Judicial officer and recommended to the President or Governor as the case may be, the removal of such judicial officer, and the recommendation is accepted and acted upon by the appropriate authority, that the prosecuting agencies of the Federal Government can proceed against such judicial officer to make him face the full wrath of the law,” he said. According to Agabkoba, “Danladi Umar knew the state of the law yet acted otherwise. Umar’s misconduct has created a constitutional crisis and brought great embarrassment to the Legal profession. Agbakoba further stated that the

CCT chairman was facing corruption charges for allegedly demanding bribe of N10million, while urging the NBA disciplinary committee to take action to strick out his name from the roll of legal practitioners in Nigeria. “On January 23, 2019, the Code of Conduct Tribunal of which Danladi Umar is chairman issued an Exparte Order which on its face is clearly defective having not set out on record the Counsel that made the application. This gives the impression the CCT may have drawn up the Application on itself. This led the President of Nigeria to purportedly suspend the Chief Justice of Nigeria, Honourable Justice Walter Samuel Nkanu Onnoghen and purportedly appoint an Acting Chief Justice of Nigeria, Justice Tanko Mohammed, as the Acting Chief Justice of Nigeria. “Umar’s misconduct has created a constitutional crisis and brought great embarrassment to the Legal profession.

Meanwhile, in Lagos State, the commission has said it had commenced the training of adhoc staff for the general election. Public Relations Officer (PRO) of INEC office in the state, Femi Akinbiyi disclosed in an interview, Tuesday that the commission would select the number of adhoc staff it needs after the training. Akinbiyi further reaffirmed the commission’s readiness to conduct free and fair elections across the country. “We have commenced the training of adhoc staff for the general election in Lagos State; what we are doing is that after the training we would select those we want from the people we are training,” he said. “That is all I can say for now; I cannot tell you the number we would need in Lagos State, but we are set to conduct free and fair elections,” he added.

Ortom urges Benue electorate to vote against impunity, oppression, others enue State Governor, Samuel Ortom, has appealed to the people of the state to take their destiny in their own hands by voting against the alleged impunity and oppression of the All People’s Congress (APC) government. He spoke at the palace of the Ter Makurdi, today while consulting with the royal fathers on his reelection. Governor Ortom stated that he identified those who planned to attack the people of the state and reported them to the security agencies controlled by the Federal Government but no action was taken even after the attacks and killings. He stated that the most recent development on the matter includes plans to compromise Operation Whirl Stroke so that it would no longer stop attacks on the people adding that only massive voting against the ruling government could register the

displeasure of the people of the state and ensure more decisive action. Governor Ortom stated that if the people failed to take that action no one would stick out his neck for them in future. He said he directed chairmen of local governments affected by recent killings this year to forward the names and other statistics of those affected to the press to prove the point. The Governor listed lack of funds due to the recession that hit the country, social vices and insecurity as major challenges during his first tenure adding that he took actions on all of them promising that his second tenure would be better than the first. Governor Ortom announced an amendment to the Chieftaincy Law to include tax collectors. Second class chief of Makurdi Local Government, Sule Abenga, assured the governor of the support of Makurdi people towards his re-election.

plaintiff opined that there are two different dates of birth which the 1st defendant submitted for purposes of contesting the National Assembly election as Member of the House of Representatives for Oredo Federal in 2007 and as a Senator for Edo South in 2018. The plaintiff also alleged that in the sworn affidavit, the defendant specifying the Educational institutions that he attended with dates for the 2007 election, claimed to have left primary school the year he was born as he said he attended Our Lady of Lords Nursery School, Sapele from 1964 (the year he claimed as his date of birth in 2018) and

graduated in 1970. He thereafter, from 1971 to 1976 went to St John Bosco’s Grammar School, Ubiaja for his secondary education before attending the University of Benin from 1983 to 1987 and the Nigerian Law School from 1987-1988. The plaintiff argued that for the 2018 election, the defendant’s school attended claimed to have graduated from Edaiken School, Ahmadiyya, Benin City in 1974, Ozolua Grammar School, Ologbo in 1982 while the dates for his graduation from the University of Benin and the Nigerian Law School, remain unchanged.

BENJAMIN AGESAN, Makurdi

PDP wants court disqualify Obahiagbon over alleged perjury IDRIS UMAR MOMOH/CHURCHILL OKORO, Benin

do State chapter of the People’s Democratic Party (PDP) has instituted a legal suit against Patrick Obahiagbon, All Progressives Congress (APC) candidate for the Edo South senatorial district bordering on perjury. The party instituted the suit against the APC senatorial candidate in the Benin division of the Federal High Court. The former Oredo federal lawmaker, who also served as a chief

of staff to Adams Oshiomhole, the immediate past governor of Edo State, was alleged to have supplied false information on oath regarding his age to the Independent National Electoral Commission (INEC). In an originating summons, the party, however, prayed the court to disqualify the APC candidate from contesting the Edo South senatorial election scheduled for 16th February, 2019 on the ground that he supplied false information on oath regarding his age to INEC form CF001 The party averred that the defendant in form CF001 had in 2007 declared that he was born April 12, 1960 while in 2018 form CF001, the

APC candidate declared 12th April 1964 as his birthday date. The plaintiff opined that “Exhibit C which forms part of Exhibit B, the 1st defendant’s 2007 INEC form CF001 conclusively show that the 1st defendant was born on 12th April 1960, contrary to the false declaration in Exhibit A”. The plaintiff further averred that it is relying on the two sets of sworn affidavits of support of personal particulars which the 1st defendant submitted to INEC in 2007, with his date of birth as 12th April 1960 and in 2018 where his date of birth is 12th April 1964. Based on the sworn affidavits, the

Wednesday 30 January 2019

NATIONAL DISCOURSE

JUMOKE LAWANSON

rom experience, the electoral process in Nigeria is a stressful exercise. From the voter registration process to the day of the actual voting, prospective voters are usually made to endure standing under harsh conditions in long and sometimes disorganised queues, jostling and negotiating with thugs/ area boys/ army personnel, arguments with fellow voters over the etiquette of queuing, as well as dealing with the communal discomfort generally caused by being in a stressful atmosphere. Voters in Nigeria also, as a matter of course, witness consistently malfunctioning techOLUSOLA BELLO

he problem with power sector has remained largely unresolved in the three and half years of Muhammadu Buhari administration. It has rather been characterised by buck-passing by officers of his government. The power sector is a volatile, uncertain, complex, and ambiguous environment. The industry is complex and is characterised by issues such as regulatory challenges, geopolitical pressures, environmental issues, and bad leadership, among others. The ideal power delivery model for Nigeria envisages a transmission wheeling capacity that is at least 20 percent higher than the generation capability and a distribution capability that is at least 20 percent higher than the transmission wheeling capacity. The generation companies have an available capacity of about 8,000 megawatts (MW), with a transmission system which can only transmit about 5,000MW and a distribution network only capable of absorbing about 4600 MW. Due to sub-standard transmission and distribution system, generated power becomes rejected or is forced to be reduced to match the infrastructure that distributes this power to the customer, making GenCos operate below their optimum. The generation plants are now being run as regulating power

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Widespread skepticism to vote: Breaking the jinx nology in the electoral process leading to either disallowed or cancelled votes. Where this occurs, the belief that “the system is broken and your vote does not count” prevails and is a major cause of voter apathy; especially for most Nigerian youths. Lately, the use of social media to break the jinx has become even more popular. Celebrities, religious leaders and media houses have taken time out to emphasise the need for people to exercise their civic responsibilities by obtaining their permanent voters card (PVCs), as the first step to ensure that they vote in the upcoming elections. So much so that the hashtag #getyourpvc trended for weeks on almost all social media platforms, with 40.8 thousand posts on Instagram and millions of posts on Twitter. My conversations and interaction with a lot of people, both young and old, in the lead up to the February 2019 elections has made me to believe that there is

a general consensus that there is also a lack of credible candidates for the forth-coming senatorial, gubernatorial and presidential elections. The skepticism to vote may start with the fact that majority of the candidates that stand for the top political posts in Nigeria and many of those who have gone on to hold those posts are not academically sound enough to successfully gain employment in any serious business in Nigeria. In fact, I was baffled, four years ago, to see people excited to go out to vote for candidates whose secondary school qualifications were being questioned. I should mention that these same people who are employers of labour would not even fill the position of a support staff in their business with an applicant who does not hold a second class university degree. Where someone is not academically fit to hold a menial job in your organisation, they logically should not be your first

choice to lead your nation and pave the way for your family’s future generations. The lack of credible candidates in the upcoming Nigerian elections is not limited to academic qualifications alone. The majority of the contestants that have been forced upon the people by political parties “to make a choice” from are largely the same members of a continuous cycle of politicians who have failed at their previous political posts and whose personalities have been proven to be wanting in integrity and accountability. Therefore, many Nigerians believe that what they have been given is a choice between the devil and the deep blue sea. It turns out that in 2015, only 17 percent of the Nigerian population turned out to vote. With the issue of vote buying, election rigging and corruption, it came as no surprise that only 30 million out of Nigeria’s over 180 million population came out to vote in the presidential elections.

Fixing Nigeria’s electricity problem reserves by TCN, via its subsidiary SO/NCC. Experts have prescribed solutions such as procurement of regulating and spinning reserves as well as tools to manage the grid. TCN has refused to put these in place but are forcing Gencos to operate outside factory capability. The frequency of instructions to either increase load or decrease load and in some cases shut down has caused damaging stress to machine components. These instructions, reflective of the grid behaviour, are subjecting key electrical components of the power plant to operational stress. All the thermal and hydro power plants are designed to operate optimally and efficiently at base load. Operating these plants far away from their base loads implies a reduction in efficiency or increase in consumption of gas (for the thermal) by as much as 15-20 percent (extra cost not recognized by NBET nor captured in the MYTO). In all jurisdictions, the imperatives of power transmission networks cannot be over-emphasised. This is because the transmission network constitutes the vital channels of the entire power value chain. It goes without saying that the growth of the power sector is contingent to development of

a robust and a non-collapsible transmission network. With the steady and commendable growth of power generation, both installed and available in Nigeria, it is only possible that what is generated can all be evacuated or transmitted. A more worrisome matter is the inadequacy of power evacuation infrastructure which is largely responsible for the recurring supply shortages in the nation. Transmission, which is the critical link of power supply with no fall-back option, is incessantly ignored due to multifarious reasons. Joy Ogaji, executive secretary, Association of Power Generation of Nigeria, said the Nigerian Electricity Market (NEM) expects high performance from the transmission Company of Nigeria (TCN) since it enjoys all the necessary support from the government. However, the reverse is the case. Ogaji said it should play central and neutral roles in complementing the NEM through efficient power evacuation. This is far from being the case at present. There are predominant system outages which are often said to be caused by the Discos to reject load. “The market expects efficient and adequate control of the grid network by the system operations sub-sector of the TCN. This is not evident, given the fact that system

operator (SO) is still using radio and telephone communications systems to control the grid in the 22nd century as against deploying SCADA. “SCADA takes a big chunk of every year’s appropriation but at the end nothing comes out in terms of deploying SCADA. Poor communications system leads to the incessant system outages being experienced today. These outages take very devastating tolls on the Gencos who are not even considered for the associated deemed capacity”. The executive secretary of Power Generation Association of Nigeria said by virtue of the Power Purchase Agreement between Nigerian Bulk Electricity Trading Plc (NBET) and GenCO Power Plc (GenCo), GenCo is entitled to invoice NBET for the capacity payment for each billing period upon receipt of the final settlement statement from the market operator, following the applicable billing period. However, NBET has not paid GENCO for its available capacity since February, 2015. The Legacy GenCos as well as NDPHC are yet to be paid accumulated deemed capacity. Capacity payments are global norms in the electricity supply industry and play critical roles in enabling the GenCOs optimise generation ca-

What should we do differently this time to ensure that people come out to vote? Perhaps, it would have been nice if President Muhammadu Buhari signed the electoral act (amendment) bill 2018 to ensure a free, fair and peaceful election process. The recycling of old political candidates who have been in leadership for decades without any significant improvement in governance, and are instead, worsening the economy, is another thing that needs to be dealt with. Whatever happened to the saying, “the children are the leaders of tomorrow”? When will tomorrow come? Because the children are now grown but are not allowed to lead. Leadership in Nigeria is still in the hands of the same old set of people. I believe that nobody is ready to move to the next level of poverty or hardship and when you say you want to “Get Nigeria working again”, the question on the lips of many is “when was Nigeria ever working?” pacities, and making such capacities available when called upon. In every electricity market, there are integral parts of Power Purchase Agreements (PPA)-Must-Occur events (payment for nominated capacity, metered energy and deemed capacity). More than four years after the establishment of NBET, what is evident to both international and local investors in the power sector is that NBET is deficient in the required capitalisation to meet its obligations. It also lacks the ability to provide adequate and sustainable payment securities backed by the Federal Government under PPAs. The distribution sub-sector represents the area in need of massive infrastructural growth/development to enable the impact of gains in the generation subsector to be appreciated. Research has shown that nearly 35 percent of installed distribution capacity is not available real time, due to aged, overloaded and fragile infrastructure. In recognition of the fact that the Discos are the only source of revenue into the market, there is need to engage them on the imperatives for improved billing and revenue collection as well as technical loss reduction. Discos have repeatedly stated that a critical factor to improved revenue flows is tariff. In this regard, it must be noted that not all that is supplied is billed, and not all that is billed is collected (commercial and collection losses).

38 BUSINESS DAY NEWS 4 years after, Buhari fails to curb... Continued from page 1 report show that corruption

remains alive and kicking under the current dispensation. The biggest pledge of Buhari, a retired general, when campaigning to become Nigeria’s president in 2015, was to fight corruption to a standstill and invariably eliminate it. Four years after vigorously campaigning to root out corruption, the scourgecontinuestobeadefiningfactor in Nigeria and perhaps waxes stronger. Findings in different reports, including the latest Corruption Perception Index (CPI) by Transparency International, the Social Statistics Reports by the NBS released in December, and a report on Corruption in Nigeria produced by the United Nations Office on Drugs and Crime (UNODC) in collaboration with NBS in 2017, show corruption is not declining. Every year, at least N400 billion is paid as bribes to public officials, according to UNODC’s report, which was described as the first comprehensive nationwide household survey on corruption to be conducted in Nigeria and in Africa at large. This excludes embezzlement, contract inflations, and other forms of corruption. For the second consecutive year, Nigeria has retained its score of 27

out of 100 in the 2018 Corruption Perception Index (CPI), a woeful outcome that sees the country ranked 144 out of 180 countries in the world. In 2015 when Buhari was sworn in as president, Nigeria had a score of 26, while in 2016 the score edged up to 28 but started dropping since 2017. Sifting through historical data sets on CPI, the present 2018 corruption score of 27 for Nigeria was the same recorded in 2012 and 2014, only worse in 2013 when the country had a score of 25. In terms of corruption, Nigeria is still where it was seven years ago when it scored 27. Nigeria’s corruption indices even get worse when more localised data is considered. In the Social Statistic Report for 2017 that the NBS released in December 2018, Abuja, the Federal Capital Territoryhadthehighestnumberofreported corruption cases in 2016 with 657. The magnitude of corruption taking place right under President Buhari’s nose in Abuja, the seat of government, is far above any other state in the country. In one instance that directly involves the president, Babachir Lawal who was disgraced from his position as Secretary to the Government of the Federation when alleged financial misconduct was uncovered, is

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still seen as a member of the President’s inner circle, and involved in his re-election campaign. The NBS report curiously did not provide detailed figures on the rate of corruption for the 36 states, rather a graphical illustration. However, for Lagos, it could be deduced from the Chart that about 200 corruption cases where reported in 2016, a marginal increase from approximately 180 in 2015. Kaduna is the next prominent state after Lagos in terms of the corruption chart, with about 100 cases in 2016, from approximately 90 cases in 2015. The reported cases of corruption in Abuja put at 657 by the NBS in 2016, was also an increase, deducible from the chart as approximately 550 cases in 2015. Going by the illustration provided in the NBS report, summing up all reported corruption cases in other parts of Nigeria, may still fall below the corruption that takes places in Abuja alone. Even at this, the reported cases of corruption captured by the report are a far from those that actually go unreported. The UNODC report on Corruption in Nigeria, highlighted the amount paid to public officials in Nigeria in the 12 months prior to the survey was around N400 billion. “This sum is equivalent to 39 per cent of the combined federal and state education budgets in 2016,” stated the report. The report also noted, almost a third of Nigerian adults (32.3 per

cent) who had contact with a public official between June 2015 and May 2016 had to pay, or were requested to pay a bribe to that public official. It noted majority of those who paid a bribe to a public official did so more than once over the course of the year. According to the survey, bribe-payers in Nigeria pay an average of some six bribes in one year, or roughly one bribe every two months. The corruption fight according to public commentators requires more sincerity and determination if it will succeed. While the incumbent APC led government has continued to blame the opposition PDP for the country’s bad state, the argument appears flawed when the composition of those in government is considered. There are at least seven known former PDP stalwarts in the Federal Executive Council headed by Muhammadu buhari as President, some with corruption cases that have been halted. These include Audu Ogbeh, the Minister of Agriculture and Rural Development, who was not only a member of the PDP but served as the party’s National Chairman from 2001 to 2005. Heineken Lokpobiri, minister of state, agriculture and rural development, who was also in the PDP, where he served as speaker of the Bayelsa State House of Assembly and elected as a Senator before decamping to APC. Rotimi Amaechi, Minister of Transportation, was also in the PDP, serving

Wednesday 30 January 2019

for 8 years as Speaker of the Rivers State HouseofAssembly,andanother8years as Governor. Amaechi has been reportedly indicted by the Justice George Omeregi-led Rivers State Judicial Commission of Inquiry set up to investigate the sale of state assets, and allegedly misappropriating N97 billion. Boss Mustapha, Secretary to the Government of the Federation, was among the 7-man committee tasked by President Obasanjo to probe the Muhammadu Buhari-led Petroleum Trust Fund in 2000, the outcome of which was never made public. He was also deputy director-general of Atiku Abubakar’s campaign organisation in his failed presidential bid in 2007. Adamu Adamu, Minister of Education, was a Personal Assistant to the late Solomon Lar, pioneer National Chairman of the PDP and former Governor of Plateau state. Chris Ngige, Minister of Labour and Employment, was Governor of Anambra state under the PDP. Udoma Udo Udoma, Minister of Budget and National Planning during his time in the National Assembly, was a Senator on the PDP platform. The Buhari administration’s supposed fight against corruption does not appear to be yielding fruits, and the composition of government itself reflects notable personalities who were once members of the PDP, which the rulingpartyregularlyblamesforcorruption and Nigeria’s bad economic state.

What Indonesia can teach Nigeria about... Continued from page 1

in 2018 to 9.82 percent (based on latest data from Indonesia’s Central Statistics Agency) and a more diversified economy, with more sectors contributing to its growth. The expansion of Indonesia’s industrial sector did not happen by coincidence as deliberate and concise actions were taken by the government in line with the provisions of national and sectoral plans to create a friendly business environment and attract investments into priority sectors of the economy. For Indonesia’s President Joko Widodo who is seeking re-election in 2019, boosting economic growth has been a central policy priority. On taking office in late 2014, he inherited an economy under pressure. Growth was slowing, a large current account deficit had opened up, and the fiscal deficit was rapidly approaching the legal limit. Decisive early action by President Widodo to cut wasteful fuel subsidies successfully arrested the situation. He further launched an ambitious pro-growth agenda focused on large-scale infrastructure development, fiscal reform, and dramatically improving the business climate. To deliver his infrastructure drive, President Widodo’s strategy entailed increasing budgetary allocations (particularly by cutting energy subsidies), a heavy reliance on state-owned enterprises (including through capital injections and directly allocating major projects), and progressing previously stalled projects (in particular by expediting land acquisition). President Widodo also dramatically improved Indonesia’s difficult business climate to improve its progrowth agenda which was achieved through series of reform packages aimed principally at cutting red tape and attracting FDI. Subsidy reform and more credible budgeting have seen Indonesia’s sovereign credit rating lifted to investment grade, or higher, by all of the major credit rating agencies, a status last enjoyed before the Asian financial crisis. Indonesia adopts long- and medium-term development planning

at both national and regional levels, which started with a long-term 20-year national development plan and subsequently aligned with other 5-year medium-term plans, detailing sectoral and regional plans. The current 20-year national plan covers the period 2005 to 2025 and within this period, aligned with 3 five-year medium-term plans (2005 to 2009 and 2009 to 2014), with the latest covering 2015 to 2019. According to Indonesia’s National Graduate Institute for Policy Studies (GRIPS), the medium-term plan must be enacted by a Presidential Regulation no later than three months after the inauguration of a President which reduces, to a large extent, economic uncertainties and provides a sense of direction for the country, investors and policymakers. In addition to long-term planning, Indonesia recently concluded the development of a 20-year National Industrial Plan (2015-2035), which articulates visions, strategies and priorities for industrial development in the next 20 years. Ten priority sectors were identified and stakeholder consultations were held to drive the implementation of the plan. For Indonesia, its Law on National Development Planning System clearly stipulates the purpose, processes, scope and types of development plans that must be put in place by the government of the country which is to ensure stability of such long-term plans irrespective of political affiliations. “Nigeria is about two-thirds of Indonesia’s population and we have an economy that is about one-third of theirs, which means that in terms of per capita income, Nigeria’s about $2,000 income per head is only half their per capita income at about $4,000. So they produce more than we do despite our population being nearly the same,” Ayo Teriba, CEO of Economic Associates (EA), said. Over the past decade, Indonesia has been a consistent performer in an otherwise weak and volatile global economy. Growth has averaged 5.5 percent a year since 2003 and the economy has proved remarkably resilient, withstanding numerous shocks including the global financial crisis

Michael Dragoyevich (l), chief executive officer, Foreign Investment Network, presenting the African Icon of the Year Award to Benedict Peters, represented by SPB Jigo, executive director, Aiteo Group, at the Honourary Patrons Dinner and Awards Gala of the Nigeria International Petroleum Summit, in Abuja.

of 2008-2009, the end of the Chinafuelled commodity boom around late 2011, and acute market pressures during the ‘taper tantrum’ of May 2013. Speaking on why both countries are moving in opposite directions, Teriba said, “We shouldn’t have been poorer than them as we have become in recent years, but this happened because we have been too dependent on oil export, whereas they reduced their dependence on oil export.” He added that as a matter of fact, Indonesia’s “oil production has been declining and they will soon exhaust their oil reserves but they have learnt over the years to process their own oil and Nigeria on the other hand exports crude oil and imports petroleum products”. Whilst the service sector contributes the most to GDP in both Nigeria and Indonesia, particularly from the early 2000s, the industrial sector in Indonesia, led by non-oil and processing subsectors, increased its share of GDP showing vividly the transition from agriculture to industry-led growth. However, in the case of Nigeria, the industrial sector’s contribution to GDP (which is led by crude oil) contracted over time, a sign of high economic vulnerability.

“Indonesia improved their agricultural sector more than we did, so they have diversified export revenue, and so the fall in price of oil brought Nigeria’s economy to its knees unlike them,” Teriba explained. “The most devastating impact on Nigeria’s economy was the naira devaluation in which the naira lost more than half of its value. That would erode the real income of Nigerians by nearly the same proportion in comparison to Indonesia’s, because you compare per capita GDP in dollars,” he said. Ayodeji Ebo, managing director, Afrinvest Securities Limited, said Indonesia has been able to keep million of its population from below poverty line because Indonesia’s GDP growth rate is higher than the rate at which its population is growing, unlike Nigeria operating the reverse. “The number of Nigerians falling below the poverty line will continue to increase. This means that the government needs to think of a strategy that can jump-start the economy to grow at a rate that is almost twice our GDP growth rate,” Ebo said. According to the Nigerian Economic Summit Group (NESG) macroeconomic outlook 2019, Nigeria’s current economic growth is exhibit-

ing the same pattern as in the prerecession era, where growth was driven by few sectors. “Nigeria’s post-recession growth pattern is still skewed towards few sectors, showing the limited capacity of the economy to create jobs and reduce poverty,” the NESG report said. According to NESG, in the first three quarters of 2018, 13 out of the 19 major sectors contributed positively to GDP growth. Out of these 13 sectors, only six sectors accounted for 90 percent of the GDP growth in the period. NESG noted that comparable data from Indonesia showed that the top six sectors contributed 72 percent to the country’s GDP growth in H1 2018, leaving room for the remaining 11 sectors. Although Indonesia lags Malaysia, Thailand and other countries in terms of social and economic inclusion, its economic progress exemplified by the massive reduction of poverty rates, stable and broad-based GDP growth and the economy’s ability to withstand external shocks is not coincidental. On the way forward for Nigeria gaining back its growth, Ebo said, “At least protect the country from oil shocks; have plan B, that if the price of oil falls, it doesn’t make the large number of the population poor overnight.”

Wednesday 30 January 2019

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NNPC, EFCC implementing forensic tracking of vessels to check product diversion FRANK UZUEBUNAM & HARRISON EDEH

S Godwin Obaseki, governor, Edo State (2nd l); Haresh Aswani, chairman, Dufil Prima Foods (2nd r); Madhukar Khetan (r), and Stella Amachree, agricultural consultant to Dufil Prima Foods (l), at a meeting between the governor and management team of Dufil Prima Foods, at Government House in Benin City.

NJC queries Onnoghen, acting CJN Muhammad, refers CCT boss Umar FELIX OMOHOMHION, Abuja

ational Judicial Council (NJC), Tuesday, in its emergency meeting held in Abuja, gave the suspended Chief Justice of Nigeria (CJN), Justice Walter Onnoghen and the acting CJN, Ibrahim Muhammad, seven working days to respond to a petition filed against them. It referred the petition against the chairman of Code of Conduct Tribunal (CCT), Danladi Umar, to the Federal Judicial Service Commission (FJSC), the appropriate authority. While Onnghen was petitioned by Zikhrillahi Ibrahim of Resource Centre for Human Rights and Civil Education, Mahammad was petitioned by the Centre for Justice and Peace Initiative and human rights activist and former president of Nigerian Bar Association, Olisa Agbakoba.

The Centre for Justice and Peace Initiative wrote the one against Umar. In the statement signed by Soji Oye, Director, Information of NJC, at the end of the emergency meeting, Tuesday, the council said it considered in all four petitions, with three against the two most senior officers of the apex court. Both Onnoghen and Muhammad rescued themselves from the meeting. The content of the petitions were, however, not divulged. The Federal Government suspended Onnoghen last Friday on allegations that he failed to disclose some of his assets. He was suspended on the strength of ex-parte motion, the Federal Government secured from the CCT and Muhammad was subsequently sworn in as CJN in an acting capacity. Onnoghen was earlier arraigned before the Umar-

led Code of Conduct Tribunal (CCT) on a six-count charge. The CCT on Monday adjourned indefinitely pending when the appeal lodged by Onnoghen before Court of Appeal of Abuja Division is determined. The statement read in part: “The National Judicial Council held an emergency meeting today and considered four (4) petitions filed at its Secretariat. “The petitions are: Petition against Hon. Mr. Justice W.S.N. Onnoghen, GCON by Zikhrillahi Ibrahim of Resource Centre for Human Rights & Civil Education; “Petition against Hon. Mr. Justice Ibrahim Tanko Muhammad, CFR by Centre for Justice and Peace Initiative; “Petition against Hon. Mr. Justice Ibrahim Tanko Muhammad, CFR by Olisa Agbakoba, SAN, OON; and Petition against Hon. Danladi Yakubu Umar, chairman, Code of Conduct Tribunal by the Centre for Justice and

Peace Initiative. The council referred the petition against Danladi Umar to the Federal Judicial Service Commission (FJSC) which is the appropriate constitutional body empowered to deal with it. “In line with its procedure, the council also forwarded the petitions against Hon. Justices W.S.N. Onnoghen, GCON and I. T. Muhammad, CFR to them for their responses. “In view of the gravity of the matters involved, council abridged the usual response period from fourteen (14) to seven (7) working days for the Hon. Justices to respond. “Hon. Mr. Justice W. S. N. Onnoghen, GCON and Hon. Mr. Justice I.T. Muhammad, CFR recused themselves from the meeting. “Consequently, Council elected Hon. Mr. Justice Umaru Abdullahi, CON, former President of the Court of Appeal as Interim Chairman to preside over the meeting. “Council will reconvene on the 11th February, 2019.”

Again, FG alleges plot to subvert elections STELLA ENENCHE, Abuja

ederal Government on Tuesday vowed to “isolate and deal with” individuals and groups whom it said were behind possible plots it said it had uncovered and aimed at subverting the 2019 elections. Speaking through a statement by the Minister of Interior, Abdulrahman Dambazau, government said discovery of the alleged plot followed a “security report” on the elections. Dambazau said the security reports indicated that some individuals and groups of persons, who included politicians and their sponsors, were determined

… says individuals, groups behind plot to subvert the integrity of the electoral process. Consequently, he said government had given orders to security and law enforcement agencies “to isolate and deal with individuals or groups bent on sabotaging the process.” The move was to secure the sanctity of the elections, he said. “The Federal Government has given further directives to all security and law enforcement agencies in the country to ensure and safeguard the sanctity of the 2019 General Elections,” he said. Dambazau, a retired Army general, spoke a day

after his counterpart in the Ministry of Information and Culture, Lai Mohammed, accused the local media of bias in the coverage of the matter of former Chief Justice of Nigeria, Walter Onnoghen. He said the media had taken sides against the administration of President Muhammadu Buhari. President Buhari replaced Onnoghen last Friday and replaced him by Justice Ibrahim Tanko Muhammad as acting CJN, citing an order from the Code of Conduct Tribunal. Onnoghen is facing trial at the CCT on accusation of not fully declaring his banking details. The Onnoghen

saga, coming less than 20 days to the presidential election, has drawn wide condemnation across the country. Protests against the suspension were held in various Nigerian towns and cities on Monday, including Yenagoa, in Bayelsa State, Enugu in Enugu State, Uyo and Calabar, in Akwa Ibom and Cross River States, etc. Similarly, the Nigerian Bar Association, and some civil society organisations, has protested against the decision, arguing that President Buhari did not follow the Constitutional procedure for dealing with an erring judicial officer.

tate-run Nigerian National Petroleum Corporation (NNPC) and the Economic and Financial Crimes Commission (EFCC) are now implementing forensic tracking of vessels carrying petroleum products for importation to avert concerns of product diversion, minister of state for petroleum says. The minister, Emmanuel Ibeh Kachikwu, said this at the ongoing Nigerian International Petroleum Summit in Abuja that the initiative was part of reforms being carried out by the Federal Government to ensure transparency in the oil and gas sector. Kachikwu confirmed that diversion of petroleum prod-

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ucts was a major source of worry to the government. He explained that the various reforms being implemented by the Federal Ministry of Petroleum Resources are already yielding positive results both in the upstream and downstream sectors. “Today, for the first time, whatever you are producing in this country as regards when it is being produced barrel per barrel, we could tell. We can also tell when it is brought forward for discharge,” he said.

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Live @ The Exchanges Nigerian Breweries, Zenith, GTBank, others cause stock market’s N60bn loss Iheanyi Nwachukwu

he Nigerian Stock Exchange (NSE) All Share Index (ASI) decreased by 0.53percent after Tuesday’s trading on the Bourse, while the Yearto-Date (ytd) return stood at a negative of 0.80percent. Losses in shares of Nigerian Breweries Plc, Zenith Bank Plc, GTBank Plc, Access Bank Plc, Dangote Sugar Refinery Plc and some others led to the cumulative N60billion decline in value of listed stocks. The All Share Index closed at 31,178.71points as against the preceding day close of 31,344.24points while Market Capitalisation

closed at N11.627 trillion as against preceding day close of N11.688trillion.. Nigerian Breweries Plc recorded the highest decline from day open high of N79.9 to N78, down by N1.9 or 2.38percent. Zenith Bank Plc share price also dipped from N23.45 to N22.95, losing 50kobo or 2.13percent. GTBank Plc lost 45kobo or 1.31percent, from N34.25 to N33.8. Access Bank Plc share price decreased from N6.35 to N6.05, losing 30kobo or 4.72percent; Dangote Sugar Refinery Plc lost 20kobo or 1.40percent, from N14.3 to N14.1. PZ Cussons Nigeria Plc share price increased from N11.3 to N12.15, gaining 85kobo or 7.52percent. RedStar Express Plc gained from N5 to N5.5, up 5kobo or 10percent. Cadbury Nigeria Plc rallied by 20kobo

or 2.04percent, from N9.8 to N10. UAC-Property Development Company Plc gained, from N1.57 to N1.72, up 15kobo or 9.55percent; while Sterling Bank Plc advanced from N2.24 to N2.3, up 6kobo or 2.68percent. The volume of stocks traded increased by 61.44percent from 222.68 million to 359.51 million, while the total value of stocks traded increased by 3.76percent, from N1.843 billion to N1.913 billion in 3,773 deals. UBA Plc, Sterling Bank Plc, Diamond Bank Plc, and RedStar Express Plc were actively traded stocks. The Financial Services sector led the activity chart with 301.67million shares exchanged for N1.4 billion; Services followed with 25.96million shares traded for N114 million.

Sterling Bank opens $16bn global market to Nigerian businesses HOPE MOSES-ASHIKE and GBEMI FAMINU

ustomers of Sterling Bank Plc are set to access a new stream of foreign direct investment following a partnership announcement by the bank on Monday. The partnership with Opportunity Network, a business match-making platform headquartered in Barcelona with offices in London and New York City as well as 30 other countries is valued at about $16 billion across 17 African member-countries. Abubakar Suleiman, chief executive officer of Sterling Bank, while addressing media stakeholders in Lagos said that the bank is proud to partner with the global firm, remarking that the single most important thing that a bank provides is trust. He added that Opportu-

nity Network establishes that trust between investors across the globe. Suleiman said the partnership would enable Sterling Bank place its customers on the platform which in turn will increase their ability to collaborate with potential business partners across the globe. Also speaking on the partnership, Mojisola Bakare, divisional head, corporate clients coverage sales at Sterling Bank, described Opportunity Network as a platform that provides seamless trading between local businesses and foreign investors. In her comments, managing director of Nigeria Opportunity Network, Adriana de la Cruz Duffo, said the platform is a tool for enhancing business growth as well as a digital platform for vetted CEOs and investors to share and connect with reliable trade and investment deals globally. Duffo described Op-

portunity Network as a “private invitation-only network of business owners, CEOs and high net worth individuals carefully selected and vetted by a financial institution or law firm who is our trusted partner.” She said 25 companies have indicated interest in the platform with about 20 on the verge of closing their deals at the pilot stage in Nigeria. She added that the platform aggregates high-quality commercial, mergers, acquisitions and capital related opportunities from around the world into one single, online location. “Business deals are actionable and proprietary and can be posted and searched by deal type, industry, geography and deal size,” she said, adding that the organisation’s platform “aggregates the vetted clients of financial institutions and professional associations.”

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Bangladesh takes first LNG delivery from Nigeria, three months earlier STEPHEN ONYEKWELU

igeria is supplying its first liquefied natural gas (LNG) cargo to Bangladesh, a South Asian country of 164.70 million people through the Oman Trading International, three months earlier than scheduled. The long-term contract with state-owned Petrobangla was originally due to start May 2019, a senior official with the importer said Monday. Oman Trading International’s contractual deliveries for 1 million metric

tons/year of LNG will span over 10 years. The Cape Ann LNG carrier, loaded with 136,000 cubic metre of Nigerian LNG, was expected to reach Bangladesh’s floating LNG terminal at Moheshkhali Island January 30, according to S&P Global trade flow software cFlow. The new volumes are set to boost utilisation rates at Excelerate Energy’s floating LNG terminal, which have remained at around 60 percent, as domestic pipeline delays have resulted in fewer deliveries from Petrobangla’s longterm contract with QatarGas.

The SPA with OTI was priced at 11.90 percent of the three-month average of Brent crude oil prices plus 40 cents/ MMBtu. Under the contract, both parties may agree to increase LNG imports to 1.5 million mt/year, or lower them to 900,000 mt/year. This follows Bangladesh’s decision, last week to scrap a non-binding LNG supply agreement with Swiss trader AOT Energy for the delivery of 1.25 million mt/year over 15 years, on domestic infrastructure delays and the country’s goal to secure a larger share of LNG from the spot markets.

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Awards: Dangote Foods fetes 77 distributors, promises better days

t was a day of huge financial rewards laced with pomp for the customers and distributors of Dangote food companies as the management doled out millions of naira in addition to all-expense paid trips to Dubai in appreciation of their patronage for the year 2018. Hundreds of customers as well as 77 major distributors from across the nation were honoured at the 2018 Dangote Customers Celebration and Food Distributors’ Award Night, organised by Dangote Foods. Dangote Foods comprises of Dangote Flour Mills, Dangote Sugar Refinery and NASCON Allied Industries. At the award dinner held

Tuesday in Lagos, 54 winners emerged from the geopolitical regions while the balance was in the other and national categories. Ali Balarabe of Balarabe & Sons emerged the overall best performing customer in the national category for the second consecutive time. In her welcome address, chairman of NASCON Allied Industries, Yemisi Ayeni, who described the customers as ‘the most important part of our business,’ said the recognition of this symbiotic partnership formed the theme of the award ceremony; ‘Better. Stronger. Together.’ She added that the event was to honour the customers who made it possible for Dangote food

products to be the preferred choice in all households. She said, “Your continuous patronage over the years demonstrates your confidence in our product range; sugar, flour and salt. You have helped to create awareness for Dangote Food products across the six geopolitical regions. This has led to increased consumption of our products in the regions.” President/CE, Dangote Industries Limited, Aliko Dangote, in his remarks, said the award was to appreciate customers and distributors who through their dogged and persistent efforts had made Dangote Foods products a household name in Nigeria.

44 BUSINESS DAY NEWS Our refinery model is driven by efficiency, innovation - Dangote www.businessday.ng

FRANK UZUEGBUNAM & HARRISON EDEH,Abuja

he ongoing investment in refining, petrochemicals, fertilizer and gas is driven by the desire to bring innovation and efficiency into all aspects of Nigeria’s oil and gas sector, Aliko Dangote, president/chief executive, Dangote Group, says. Dangote, who made this disclosure at the ongoing Nigeria International Petroleum Summit in Abuja, said the company was committed to the concept of energy efficiency and innovation in the oil and gas sector. The business mogul, whose 650,000 barrels-perday capacity refinery is the largest in Africa, was represented by the group executive director, Government and Strategic Relations, Dangote Industries Limited, Ahmed Mansur. Addressing participants at the forum, Mansur said the theme of the conference,

“Shaping the Future through Efficiency and Innovation,” was quite apt, given Nigeria’s quest for economic transformation. According to Mansur, Aliko Dangote is passionate about efficiency and innovation in the oil and gas sector through value addition to the hydrocarbon process. He said the company’s passion and drive was seen in the building of the project, which would become the world largest single train refinery on completion and therefore a boost to Nigeria’s economy. He stated: “The Refinery can meet 100% of the domestic requirement of all liquid petroleum products (Gasoline, Diesel, Kerosene and Aviation Jet), leaving the surplus for export. “This high volume of PMS output from the Dangote Refinery will transform Nigeria from a petrol import-dependent country to an exporter of refined petroleum products. The refinery is designed

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to accommodate multiple grades of domestic and foreign crude and process these into high-quality gasoline, diesel, kerosene, and aviation fuels that meet Euro V emissions specifications, plus polypropylene,” he said. Mansur disclosed that Dangote was also constructing the largest fertiliser Plant in West Africa with capacity to produce 3.0 million tonnes of Urea per year as part of the gigantic economic transformation project. He explained that the Dangote Fertiliser complex consists of Ammonia and Urea plants with associated facilities and infrastructure. “Nigeria will be able to save $0.5 billion from import substitution and provide $0.4 billion from exports of products from the fertiliser plant. Thus, supply of fertiliser from the plant, which is set for commissioning before the second quarter of 2019, will be enough for the Nigerian market and neighbouring countries,” he said.

Obaseki proffers strategic leadership to quell insurgency, other security challenges at Defence College lecture

overnor Godwin Obaseki of Edo State has charged managers of the nation’s security architecture to deploy knowledgebased strategic leadership to quell the numerous security challenges confronting the nation. Obaseki, who said this in his lecture entitled: ‘Strategic Leadership, My Political Experience,’ at the National Defence College, Abuja, on Tuesday, explained that the “the military of the 21st century is fighting against myriad of problems and confronted with different crises beyond what they were

originally established and trained to do.” He lauded the management and staff of the National Defence College for creating the platform for leaders to share their experiences and knowledge “aimed at generating ideas for the benefit of Nigeria in particular and for the security and good governance of the Lake Chad Basin, the West Africa subregion and the continent of Africa in general.” On the relevance of his experience and knowledge of strategic leadership to the armed forces and public service, the governor said: “Nigeria like several

other countries is faced with a myriad of security issues. “You are aware that part of the nation’s national security challenge today despite monthly and yearly huge security votes and defence spending by government include: insurgency in the North-East (Boko Haram insurgency), transborder violent crimes, secessionist’s threat from the South-East; Biafra secessionists, Independent Peoples of Biafra (IPOB), Movement for the Survival of the Sovereign State of Biafra (MASSOB) and Biafra Independence Movement (BIM).

FG launches Humanitarian Response Plan for North East SEYI JOHN SALAU

he Federal Government on Tuesday in Abuja launched the 2019 Humanitarian Response Plan and the 2019-2021 Humanitarian Response Strategy for the development of the North East Region of Nigeria. Udoma Udo Udoma, minister of Budget and National Planning, who launched the Plan, said it is a product of a collaborative effort between the Government of Nigeria and the country’s Development Partners; and it aims at ameliorating the sufferings of the people of the NorthEast caused by an insurgency that has resulted in wide-

spread humanitarian crisis. A statement signed by Akpandem James, special adviser (media) to the Minister, said the launch was carried out during the Ministerial Meeting on Protection in the Lake Chad Basin and the Humanitarian Response Strategy for the North East which entered its second day on Tuesday. It was presided over by President Muhammadu Buhari, who was represented by Vice President Yemi Osinbajo. The meeting was attended by representatives of the countries in the Lake Chad Basin – Cameroon, Chad and Niger; UN Special Representative of the Secretary General for West Africa

and the Sahel Region; representatives of United Nations Agencies in Nigeria; members of the Diplomatic community; some members of the Federal Executive Council; Representatives of the affected States of the North East Region; the World Bank and other development partners. Udoma told the gathering that the 2019 Humanitarian Response Plan (HRP) is part of a three-year strategy (2019 – 2021) evolved through a multi-stakeholder approach under the coordination of his Ministry in collaboration with donors, to address the needs and challenges of the affected people of the North East Region.

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NEWS FG expects Nigeria’s maritime CBN to sanction banks, OFIs, others over Lagos moves to avert Apapa experience in Lekki Free Trade Zone infraction of e-payment of salaries regulation industry to grow by 10% in 2019 CHUKA UROKO

agos State government says it is doing all it can to avert the ugly experiences in Apapa, Nigeria’s premier port city, where congestion and gridlock resulting from inadequate and collapsed infrastructure have made the city uninhabitable and anti-investment. Governor Akinwunmi Ambode, who disclosed this at the launch of the new Alaro City at the Lekki Free Trade Zone (LFTZ), said the state government had perfected plans to construct coastal roads to link the zone to the mainland. This is in addition to a 5-hectare truck park that will contain both trailers and tankers that will be coming to the zone for business. The LFTZ is home to many new developments such as the Dangote Refinery, the Lekki Deep Sea Port, an Airport, petrochemical and fertilizer plants, among other developments that will be attracting heavy vehicular and human traffic to that corridor in the next five to 10 years. The governor, in his keynote speech at the launch, also

disclosed that the state government hasd acquired about 750 hectares of land for the resettlement of the Ibeju Lekki and Epe indigenes who will be displaced by the coming developments, adding that the development of the Alaro City was part of the government’s responses to the anticipated challenges from the new developments. Alaro City is a mixedincome, city-scale development with master-planned areas for offices, logistics and warehousing, homes, schools, healthcare facilities, hotels, entertainment and 150 hectares of parks and open spaces. It is a joint venture development by Rendeavour, Africa’s largest new city builder, and Lagos State government, through their subsidiary, North West Quadrant Development Company (NWQDC). The new city, on completion, will be sitting on 2,000 hectares of land. NWQDC is authorised by both the Federal Government of Nigeria, through the Nigeria Export Processing Zones Authority, and the Lagos State Government as an entity to develop, operate, administer and manage Alaro City.

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entral Bank of Nigeria (CBN) will charge Deposit Money Banks (DMBs) N2.5 million and Other Financial Institutions (OFIs) N1 million on every repeated occurrence, as penalty fee for an infraction of using 3rd party e-payment solution that is not approved by it. In addition to this, the apex bank will also serve warning letter to the managing directors of these financial institutions. The DMBs, OFIs and the Mobile Money Operators (MMOs) are to ensure 3rd party endto-end e-payment solution used by the bank/financial service provider is approved by CBN. The CBN on Tuesday issued an exposure draft on the regulation of end-to-end e-payment of salaries, pensions, and other remittances, suppliers and revenue collections in the country. In a circular signed by Sam Okojere, director, payments system management department, the move is to enhance the adoption of electronic payments while

ensuring stability in the payment system. The objective of the endto-end electronic payment of salaries, pensions, suppliers and taxes initiative is fully aligned with the core objectives of the National Payment Systems Vision 2020 (PSV2020), which is to ensure the availability of safe, effective and efficient mechanisms for conveniently making and receiving all types of payments from any location and at any time, through multiple electronic channels. This will reduce the time and costs of transactions, minimise leakages in revenue receipts and at the same time provide reliable audit trails, thereby making the Nigerian payments system align with international best practices. Also contained in the exposure draft was the N5,000 penalty for each day for which report is not provided to the CBN as well as penalty of N250,000 and a warning letter to the managing director. The financial institutions provide monthly report to the Bank on reported complaints and resolution status.

AMAKA ANAGOR-EWUZIE & MICHAEL ANI

igerian maritime industry has been predicted to grow by 10 percent in terms of volume in 2019, on the back of six major drivers, according to industry forecast by the Nigerian Maritime Administration and Safety Agency (NIMASA). The growth will be driven largely by macroeconomic indicators from both the international and domestic economics, even as the shipping, coastal and maritime regulator rolls out plans to ward off challenges in the sector. On the positive side, the report predicted increased opportunities for tanker vessels, container vessels, offshore support vessels and Cabotage operations especially on possible signing into law, the much awaited Anti-Piracy Bill and Petroleum Industry Governance Bill (PIGB). Other drivers of this growth includes general global economic conditions, global trade conditions and developments in crude oil market, while availability of and access to foreign exchange, domestic economic growth and associated

growth in trade as well as developments in the domestic maritime regulations will drive growth from the domestic market perspective. In 2018, the Nigerian maritime industry was projected to grow by 2.5 – 5 percent with a projected increase in demand for maritime services during the period. However, Nigeria failed to achieve the 5 percent as predicted but according to NIMASA, maritime industry was closer to achieving the 5 percent target. “From our forecast, we expect demand for maritime infrastructure to increase simply because we expect to see a 10 percent more tonnage coming through Nigeria’s port, meaning that everybody in the industry will have to up their games not just in terms of infrastructure but also in services to meet the demand that we expect,” Doyin Salami of Kainosedge Consulting, said while presenting the 2019 forecast in Lagos, Tuesday. The Nigerian economy is still at its fragile state since exiting recession in the second quarter of 2017, with growth in Q3 2018 at 1.8 percent year-on-year, according to NBS data.

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FG seeks increased PPP agreements to deepen infrastructure development CYNTHIA EGBOBOH, Abuja

he Federal Government on Tuesday called for more Public-Private Partnership (PPP) arrangements as a way of ensuring sustainable infrastructural development in Nigeria. Gabriel Aduda, permanent secretary, Office of the Secretary General of the Federation, stressed on the need for increased PPP agreement to promote rapid development of infrastructure within the country. Aduda said, “The only way we can make progress in infrastructure developments is to increase our partnership with the private sector, as we all know expansion of infrastructure will directly lead to job creation and overall economic growth,” while speaking at the PPP Financing,

Policy and Law Master Class organised by NEOEDGE in partnership with the Infrastructure Concession Regulatory Commission, in Abuja. He said with the backlog of $3 trillion infrastructure deficit, there was an urgent need for full participation of the private sector as government lacked the financial capacity to meet this need. The need for the PPP policy master class cannot be over emphasised, as it seems to enhance the knowledge of the participants on how they can be better players and improve on their negotiation skills, he said. “Oftentimes, we discover that the government is lightly equipped but we are saying not anymore, we want situations where government is able to equip itself to enhance its negotiations skills and methodology to ensure that the country gets value

for money whenever government engages in PPP,” he said. Chidi Izuwah, directorgeneral/CEO, ICRC, said with the Commission playing the lead role, PPPs in Nigeria were gradually maturing, adding that the government had ensured the establishment of the PPP Consultative Forum of all PPP Unit Heads of ministries, departments and agencies at the federal and state government levels so as to ensure sustained success of PPPs in Nigeria. “These fora have enabled and entrenched the harmonisation of activities, communication and knowledge sharing. Also, one of the key structures we have put in place for the sustained success of PPPs in our country is the establishment of the PPP Consultative Forum (3PUCF) of all PPP Unit Heads of ministries, departments and agencies at the Federal level;

and the Nigeria PPP Network (NPPPN) of all PPP Heads of the state governments at the sub-national levels,” he said. Speaking on the journey so far, Izuwah explained that in 2017 and 2018, five PPP projects in different sectors received approvals of the Federal Executive Council, to enable them achieve Commercial Close and a subsequent Financial Close. He listed some of the projects to include; the Abuja Kaduna Kano pipeline project of the Federal Ministry of Petroleum Resources; the Grain Storage Silos projects of Federal Ministry of Agriculture and Rural Development; the Solar roof top project of the Federal Ministry of Power, Works and Housing; the Warehouse in a Box project of the Federal Ministry of Health, and the ECOWAS Biometric project of the Federal Ministry of Interior.

Bobboi Ahmed, executive secretary, Petroleum Equalisation Fund (PEF), (r), conducting Emmanuel Kachikwu, minister of state for petroleum resources, (m); Maikanti Baru, group managing director, NNPC, (l), and others, round the PEF exhibition stand, at the on going Nigeria International Petroleum Summit, in Abuja, yesterday. NAN

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VG Pensions names Godson Ukpevo as new MD/CEO ENDURANCE OKAFOR

eritas Glanvills Pensions Limited (VG Pensions) has announced the appointment of Godson Ukpevo as its new managing director/CEO. Head of Investment, Ugbede Nelson Attah, who disclosed this in a statement issued in Lagos on Monday, said Godson had resumed duty. Nelson stated that Ukpevo emerged the best person for the position after a meticulous recruitment process and subsequent approval from the National Pension Commission (PenCom). “The new CEO brings to VG Pensions over two decades of cognate work experience in functional areas across financial services, relationship management, risk management, business development, change management, financial reporting, and budgeting. With robust experience cutting across private and public sectors, Godson possesses invaluable experience and knowledge to lead the Company to greater heights. “Godson played strategic and pioneer roles in the reforms of the Nigerian Pension industry, in particular, the old Defined Benefit Scheme of the Federal Government, as the pioneer Director and head of the Civil Service Pension Department of the Pension Transitional Arrangement Directorate, PTAD. Prior to joining VG Pensions, Godson’s career progressed steadily over time across different organisa-

tions and in different capacities,” Nelson said. He further noted that Godson had worked in several companies like Ecobank Nigeria Limited, First City Monument Bank plc, Citizens International Bank and Clay Grounds Agro Allied Co. (Nigeria) Limited (Member, AFEX Commodities Exchange Limited). “He attended Notre Dame College, Ozoro, Delta State, for his West African School Certificate (WAEC). He proceeded to the University of Benin, Benin City, where he bagged his Bachelor of Science degree in Sociology and Anthropology, thereafter he obtained an MBA in Marketing at the Enugu State University of Technology and another Masters in Banking and Finance from the University of Lagos. The Head of Investment further stated that members of the senior management team and staff were excited to have Godson on board and were positive that his experience would count in providing strategic leadership for the organisation.

‘Total to contribute 23% of Nigeria’s crude oil output soon’ Reps pass National Minimum Wage Bill, approves N30,000 HARRISON EDEH

anaging director of Total E&P Nigeria Limited, Nicolas Terraz, has disclosed that the firm will be responsible for 23 percent of Nigeria’s crude oil output in the near future. Terraz, who was represented by the deputy managing director, Deepwater, Total E&P Nigeria Limited, Ahmadu-Kida Musa, made the disclosure while delivering a goodwill message at the second edition of the Nigeria International Petroleum Summit (NIPS) in Abuja. While stressing the importance of efficiency and innovation, as key factors that will increase productivity in the oil and gas industry, he disclosed, “Total’s projects in Nigeria have been industry benchmarks with regard to efficiency

and innovation. According to Terraz, one of the Total projects on the lips of everyone at the moment is Egina. “At plateau, Egina will add 200, 000 barrels of oil per day to Nigeria’s current production and this represents about 10% of Nigeria’s current production. With Egina, Total will be operating about 23% of the national production and we are proud to be significant contributors in securing Nigeria’s oil and gas future,” he said. Egina set unprecedented records of local content and capacity building. The project stands as a testament to Total’s commitment to Nigeria and its determination to support and advance local content development. 77% of man-hours worked on the project was done locally with 60,000 tons of equipment fabricated in Nigeria by local contractors.

In addition to drilling records and other significant achievements, the Egina project achieved the integration of six locally fabricated top side modules in Lagos; a first for Nigeria and Africa. The ongoing second edition of the Nigeria International Petroleum Summit (NIPS) has the theme “Shaping the Future through Efficiency and Innovation.” The event, attended by oil ministers from eight African countries, was declared open by the Minister of State for Petroleum Resources, Emmanuel Ibe Kachukwu, who represented President Muhammadu Buhari. Also in attendance was the Group Managing Director, NNPC, Dr. Maikanti Baru as well as several executives representing International and local Oil companies.

OWEDE AGBAJILEKE, Abuja

ouse of Representatives on Tuesday passed the National Minimum Wage Bill at N30,000 for Nigerian workers. The lower legislative chamber passed the bill about a week after President Muhammadu Buhari sent it for consideration. This followed the adoption of the report of the ad-hoc committee set up to look into the bill. While considering the bill, the lawmakers resolved to leave the national minimum wage “as recommended by the tripartite committee.” Recall that the tripartite committee had recommended N30,000 as new

minimum wage for its workers while the National Council of State approved N27,000. The House of Representatives said it decided to adopt the report of the tripartite committee because of the worsening living conditions of Nigerian workers. They, however, retained the original clause in the bill, which excluded employers of less than 25 people from paying the new minimum wage. The bill is expected to be sent to the Senate for concurrence. The upper legislative chamber has, however, adjourned and will resume plenary by February 19. In a letter to Yakubu Dogara, speaker of the

House of Representatives last week, President Muhammadu Buhari had sent a National Minimum Wage (Amendment) Bill, calling for the increase of the minimum wage from N18,000 to N27,000. This comes as lawmakers concluded debate on the N8.83 trillion 2019 Appropriation Bill, as well as read and passed it through the Second Reading. They consequently referred the Appropriation Bill to the House Appropriations Committee and other related sub-committees for further legislative action. The House thereafter adjourned plenary till February 19, three days after the Presidential and National Assembly elections.

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Atiku writes US, UK, EU, others over Buhari’s alleged constitutional breaches INNOCENT ODOH, Abuja

ormer Vice President and presidential candidate of the People’s Democratic Party (PDP), Atiku Abubakar, has written to some foreign missions in Nigeria, detailing what he referred to as “Constitutional Breaches Under The Watch Of President Muhammadu Buhari”. Atiku in the letter written to the ambassadors of United States (US) France, Germany, European Union (EU) and the United Kingdom (UK) High Commissioner to Nigeria on Tuesday said President Buhari was threatening Nigeria’s democracy with his brazen breaches of the laws of Nigeria. Atiku said he chose to write the letter in recognition of the enviable role that these countries play as champions of Democracy and the Rule of Law. “I am also writing you as Nigeria’s international de-

velopment partner working together to deepen and strengthen our democracy as well as to help in the transformation of our economies and societies for the better. “President Muhammadu Buhari is threatening our democracy by serially breaching the provisions of our constitution and undermining organs and institutions of State in order to advance his personal interest. While the President has ironically taken oath to safeguard and defend the Constitution of the Federal Republic of Nigeria, the reality of his selective and wanton violations of its provisions means that his oath is observed only in the breach,” Atiku said. He said respect for the rule of law is integral to promoting and preserving the values and principles of democracy, stressing however, that it is sad that by the actions of the government of President Muhammadu Buhari, one is forced to

think otherwise. “As a Presidential Candidate in the forthcoming General Elections that will be conducted and supervised by the Government of President Muhammadu Buhari, I feel the urgent need to share with you some of these key violations of the provisions of our constitution and to demand that you pile pressure on the Federal Government to desist from these violations and ensure a level playing field for the General Elections that are only a couple of weeks away. The former Vice President highlighted some of these constitutional infractions to include: The Purported Suspension of CJN Onnoghen “On Friday, January 25, 2019, our nation woke up to the shocking news of the unilateral and extra-constitutional suspension of the Chief Justice of Nigeria, Justice Walter Onnoghen and the immediate appointment and swearing in

of Justice Ibrahim Tanko Muhammad, as the new acting Chief Justice of Nigeria (CJN). This action of President Muhammadu Buhari, not only breaches the Nigerian Constitution, but has also managed to undermine Presidential democracy by assaulting one of its hallowed doctrines of separation of Powers.” Atiku also alleged that the illegal purchase of the Tucano Aircraft was another breach of the law by Buhari. “President Buhari sometime in April 2018 approved the purchase of Tucano Aircrafts for the Nigerian Military at the sum of $496 million (Four Hundred and Ninety-Six Million United States Dollars). This, he did, without seeking prior approval of the National Assembly contrary to Section 80 (3) and (4) of the 1999 Constitution (as amended) which states very clearly, how the President can spend monies belonging to the Federation. It provides:

L-R: Adebola Sanni, group head, business development, SWIFTA; Adedotun Eyinade, programme manager, Nigeria Off-Grid Market Acceleration Programme (NoMAP); Vera Nwaze, managing director, Azuri International, and Heather Onoh, founder/ CEO, Smarter Grid International, during the press conference announcing the integration of the initial five solar home system companies into SWIFTA’s Omnibranches platform in Lagos, yesterday. Pic by Olawale Amoo

NBA’s court boycott order records partial success in Abuja FELIX OMOHOMHION, ABUJA, IDRIS UMAR MOMOH & CHURCHILL OKORO

rom every indication, the boycott order by the Nigerian Bar Association (NBA) recorded partial success in Abuja, Tuesday. Paul Usoro, NBA president, had after an emergency national executive council of the association in Abuja on Monday called on lawyers not to attend court sessions on Tuesday and Wednesday to protest President Muhammadu Buhari’s suspension of the Chief Justice of Nigeria, Walter Onnoghen. BusinessDay findings, however, revealed that lawyers who had cases listed for hearing at the Supreme Court and Court of Appeal on Tuesday attended the courts’ sittings. At the Federal High Court, Maitama, only one of the

… 100% in Edo, Calabar, others courts sat. Lawyers who had cases were in court to take date for next sitting. At one of the courts, after a rowdy atmosphere created by the lawyers, the judge in chamber invited the senior lawyers for consultation. According to one of the senior lawyers, who addressed other lawyers in the courtroom after the meeting, the judge was ready to sit, although he found out that other courts were not sitting. Also, members of the NBA, Edo State chapter, boycotted courts proceedings across the state in line with the national body directives of the union. The boycott affected the Court of Appeal, Federal High Court, and the Oredo Area Customary Court.

Also affected were the Criminal High Court, Aiguobasimwin, the State High Courts and the Magistrate courts. As early as 7am, the compliance committee members, led by the branch publicity secretary, Douglas Ogbankwa, were at the premises of the High court, Benin City, to effect compliance. In an interview, chairman, NBA in Benin, Collins Benson, said the boycott recorded 100 percent compliance. Benson added that the judiciary staff of the Edo State Judiciary were excited about the boycott. A notice placed on the notice board of the High court in Benin, warned that sanctions await any lawyer who flouted the directive.

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Wednesday 30 January 2019

Aspen Energy 2nd Reforms: Raw materials annual roundtable for industries, others to holds today be sourced in Edo FRANK UZUEGBUNAM

spen Energy, an integrated energy consultancy company, will host the second Aspen Energy Roundtable on January 30, 2019, in Lagos. The event, a platform for thought leadership in Nigeria’s energy sector, attracts leading operators in the energy sector in the country as well as top policy makers. The theme of the Roundtable is “Gas Business in Nigeria: Challenges and Opportunities”. It will feature deliberations on the full spectrum in Nigeria ranging from the Nigerian gas master plan- the journey so far, to financing natural gas projects in Nigeria, among other topics. According to Benjamin Ofodile, managing director of Aspen Energy, the Roundtable aims to articulate the organising logic for building a vibrant and sustainable energy sector in Nigeria. The intellectual content is usually very rich with the final output distilled and communicated to various stakeholders, including government, Ofodile says. The guest speaker at the Roundtable, Dada Thomas, is the immediate past president of the Nigeria Gas Association and MD/CEO of Frontier Oil Limited, while other respected leaders in the oil and gas sector of the Nigerian economy are expected to participate. Aspen Energy Limited is an integrated energy company established in 2010 to provide an assortment of expert services across the upstream, midstream and downstream sectors of the energy value chain in Nigeria and the West African sub region. The company aims to create long-term value in the sub-Saharan African oil and gas industry.

ar-reaching reforms in land administration, tax system coupled with a favourable investment climate and an endearing support structure being spearheaded by Edo State governor, Godwin Obaseki, have set the stage for the coming on board of Dufil Prima Foods to the oil palm scene in the state, as the company has acquired 17,954 hectares of land in the state to operate an oil palm plantation. The plantation, according to the management of Dufil Prima Foods, will serve as the company’s source of raw materials for its products that include Indomie Instant Noodles, Power Oil, among others. During a recent meeting with Governor Obaseki, where the company finalised the take-off of the oil palm plantation project following the acquisition of the land, chairman, Dufil Prima Foods, Haresh Aswani, said the project was initiated to boost Nigeria’s economy while fulfilling the raw material requirement for the company’s backward integration programme. Aswani said the project would provide raw materials for the production of Indomie Noodles, Power Oil (Vegetable Oil) and other products manufactured by the Dufil Group as well as create employment opportunities for Nigerians. Aswani explained that Nigeria had a great potential to increase production in the agro-allied sector through the application of improved processing methods and creation of incentives for manufacturers in the agro-allied industry sector to embark on backward integration by investing in palm plantation and sourcing their vegetable oil requirements locally.

Buhari’s fight against corruption yet to yield desired results ISRAEL ODUBOLA

igeria ranks 144 out of the 180 countries captured in the survey, an upward movement of four places compared with 148/180 in 2017, according to the 2018 Corruption Perception Index (CPI) report released by Transparency International (TI) on Tuesday. Nigeria’s score on the 2018 CPI stood at 27/100 points, maintaining similar level with 2017 CPI. Nigeria is still believed to be highly corrupt, and although the ranking showed that the country inched four spots higher, indicating that four countries scored worse while Nigeria stagnated. President Buhari, who came to power on the

strength of his anti-corruption in 2015, is facing another election next month. Many believe that the anti-corruption crusade of the Buhari-led administration is partial as it favours corrupt members of the ruling party – the All Progressives Congress (APC). “I don’t reckon that we have a credible local measure of progress in this regard. That a well-meaning president on anti-corruption front has not succeeded as much as he probably desires speaks to the scale of the problem,” Raji Rafiq, chief economist at Macroafricanintel, tells BusinessDay. “And even as everyone agrees that corruption is a major constraint on our development, people care more about jobs and food on their table”, Rafiq says,

adding that the country’s style of politics thwarts any anti-corruption efforts. A Lagos-based political economist, Gbenga Ojewoye, says there is nothing surprising about the stagnation in the country’s score on CPI for two years, as the current administration has not been sincere in its anticorruption fight. His words, “I wouldn’t be surprised if we are ranked high on corruption. Corruption is embellished across all sectors of the economy. Remember few years back, a former prime minister said that we are fantastically corrupt. If this is not reduced to the barest minimum, something worse might happen.” Nigeria’s highest rank was in 2008 when the country moved to 121st position out of 180 countries.

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LOCUS CLASSICUS

Foakes vs. Beer (1884) 9 App. Cas. 605 He who comes to equity must come with clean hands W I MAXIMS OF EQUITY

hat this maxim of equity means is that if you are guilty of wrongdoing then you should not approach equity for relief. Equity will not aid or help you when you are also guilty. Equity will not assist a person to profit from his wrongdoing. If you must approach equity for remedy then you must check yourself to see that you haven’t contributed to the wrongdoing in one way or another. An example of such situation is when you approach the court for the enforcement of your right under a contract you entered into with a person, you must be sure that you haven’t broken any of the covenants or terms in the contract. Equity will not

aid you if you have breached the contract and you seek to enforce your right under the same contract.

plaintiff and other drivers to return their contracts for correction. The plaintiff refused and sought to have the

contract enforced. The court refused to grant the equitable remedy of specific performance based on the fact that

it would be inequitable to do so since the plaintiff was trying to exploit the defendant’s mistake.

the application, then I see nothing wrong or unconstitutional for a trial court to deal with an ex-parte motion under its rule”. It must be noted that the court at the stage of ex parte application is not going to delve into the merit of the case. The application is usually brought to seek a temporary order of court in a situation where irreparable damage or harm will occur if the other party is put on notice. It is usually used in urgent matters. Examples of such situation where ex parte order is usually granted are – where property is involved (to preserve the property), a spouse who is being physically abused can seek an order restraining the alleged abuser. The order is granted pending the time when the court will hear both parties. The Supreme Court of Nigeria in the case of Leedo Presidential Motel Ltd. v. Bank of the North, (1998) 7 SCNJ 328 at 353 stated two circumstances where an application ex parte can be made. The circumstances are – when the interest of the adverse party will not be affected (e.g. applications for leave to serve processes by substituted means) and when time is of essence (this symbolises urgent situations where things can go wrong if an order is not granted without the other party being heard). Ex parte orders are usually meant to last for few days. The other party is ex-

pected to be put on notice before the expiration period of the order. The party seeking an ex parte order is expected to make full disclosure on the matter. Failure to do so will serve as a ground to set aside the order when the failure comes to the notice of the court. Before an ex parte order is granted, the party seeking the order must show to the court that he has a legal right which is to be protected by law, that the situation is really urgent (that is why the affidavit in some situations is usually tagged ‘affidavit of urgency’), he must show that irreparable damage will be done if the court fails to intervene by granting the order and the applicant must show that there is a prima facie case (i.e. that on the basis of what is before the court there is a good legal claim). Furthermore, the applicant must undertake to compensate or indemnify the other party for any damage suffered should the substantive suit turn out to be frivolous or vexatious. Balance of convenience must also be shown – the applicant must show to the court that he will suffer injury or damage if the application is denied. The possibility of the abuse of the process (ex parte) is high and that is the reason why courts are often reluctant to grant ex parte orders. There have been instances of conflicting ex parte orders

from the same court (but different judicial divisions). Ex parte orders had also been granted in situations where they ought not to be granted. It must be pointed out that the fact that an order was granted without hearing the other side does not take away its veracity. It is an order of court and it must be obeyed. A party that is aggrieved can approach the court for the order to be set aside provided it has genuine grounds. Therefore, disregarding an order of court on the basis that it was granted without hearing both sides will make the disobedient party to be liable for contempt of court. In conclusion, ex parte applications are meant for situations that demands real urgency –where irreparable loss or damage will be done if an order is not granted in the absence of the other party. Therefore, it is an essential part of our justice system. However, in granting ex parte orders, the court must tread with caution so as not to grant orders based on frivolous applications and thereby occasioning injustice. The integrity of the judiciary must be preserved and as such the court must be careful not to grant contradictory ex parte orders. Ex parte orders are granted with the aim of doing justice and therefore should not be turned to an instrument of confusion and injustice.

n this case, Dr Foakes was the judgement debtor of Mrs Beer. They agreed to the payment of the debt (minus interest) by instalments over a long period of time. When the debt had been completely paid, Mrs Beer also requested for the interest on the judgement debt. It was held in court that Dr Foakes had to pay the interest on the judgement debt regardless of the fact that Mrs Beer initially agreed to collect just the debt. This was based on the fact that there was no further consideration paid for the foregoing of the interest of the judgement debt.

Abdul Yusuf vs. Nigeria Tobacco Company (1974) NCLR. 236:

n this case, the defendant made a typographical error in drafting the contract of the plaintiff in trans-

porting ome of its goods. Due to this mistake, the price to be paid was unduly high. The defendant requested the

Exparte Applications/Order

he recent developments in the country/judiciary make it necessary to examine again what an ex parte application is all about. Of recent, an order suspending the CJN was granted on the basis of an exparte application. So many people have condemned the action of the Court in the matter. An ex parte application usually involves only one party- the party that files it. It is usually brought before the court for the said party to be heard without the presence of the party against whom an ex parte order is being sought. Niki Tobi (JSC) in his book ‘The Nigerian Judge’ defines an ex-parte application as “proceedings brought on behalf of one interested party without notice to, and in the absence of the other party. This means that the application for interim injunction brought ex-parte is heard by trial judges in the absence of the adverse party”. Nnaemeka –Agu (JSC) in delivering the lead judgement in the case of Kotoye V CBN [1989] 1 NWLR pt. 98 gives a detailed explanation of an ex parte application when he stated that “by their very nature injunctions granted on ex parte applications can only be properly interim in nature. They are made, without notice to the other side, to keep matters in status quo to a named date, usually not more than a few

days, or until the Respondent can be put on notice. The rationale of an order made on such an application is that delay to be caused by proceeding in the ordinary way by putting the other side on notice would or might cause such an irretrievable or serious mischief. Such injunctions are for cases of real urgency. The emphasis is on ‘real’.” Is this not against the principle of natural justice?- Audi Alteram Parterm (which means that both side must be heard) and Nemo Judex in Causua (which means that one cannot be a judge in his own case). The answer is no. Uwais (JSC) in the case of 7-Up Bottling Company Limited V Abiola & Sons Limited (1995) 3 NWLR (Pt.383) noted that “there is no doubt that the right of fair hearing under the constitution is synonymous with the criminal law rule of natural justice …in both civil and criminal proceedings, there are certain steps to be taken which are incidental or preliminary to the substantive case, such steps include, motion for directions, interim or interlocutory injunction. It is in respect of such cases that the provision are made in court rules to enable the party differed to make ex-parte applications… if the Supreme Court can dispose of an applications under S. 213 (4) of the 1979. Constitution, without oral hearing of

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Nigeria’s unfriendly business environment puts it behind peers as FDI destination ...FDI falls 36% to $2.2 billion in 2018 ...2018 FDI, lowest in 13 years MICHEAL ANI & BUMI BALIEY

igeria’s unfriendly business environment is making the country worse-off in attracting foreign direct investments as investors have no choice but look into other African markets. Foreign Direct investment into the country declined 36 percent from $3.5 billion in 2017 to $2.2 billion in 2018, according to a report from United Nations Conference on Trade and Development (UNCTAD), making it the lowest foreign inflows that Africa’s largest economy has recorded in last 13 years when the Geneva-based permanent intergovernmental body started tracking FDI data across the globe. According to the report, Nigeria lagged major African countries like Egypt, South Africa and Angola in direct investment inflows despite a seven percent increase in FDI across the continent. FDI into Egypt in 2018 stood at $7.9 billion; South Africa $7.1 billion; Ghana $3.3 billion while Angola $ 5.5 billion “The monumental growth of 446 percent in FDI recorded in South Africa and the single digit growth of 7 percent recorded by Egypt is a reflection of investors’ confidence in their economies given that their economies are well industrialised coupled with their favourable operating environment”, said Gbolahan Ologunro, an equity research analyst at Lagos-based CSL Stockbrokers. Similarly, Nigeria’s West Africa’s Neighbour, Ghana overtook the oil rich African Nation as the largest recipient of FDI in the region despite Nigeria boasting a GDP that is about eight times the black star nation’s. “The paucity of FDI into Africa’s largest economy despite its huge endowment of natural resources, dynamic and youthful population continues to reflect the dearth of critical infrastructural facilities that will make the business environment conducive for businesses to thrive as well as the absence of key reforms in

vital sectors of the economy,” Ologunro said. “Furthermore, the weak performance recorded in Nigeria and Angola, the two largest producers of oil in Africa, suggests that both countries are yet to put in place the much-needed infrastructure that will reduce the bottlenecks in the operating environment, implement policy measures and key reforms that will liberalise entry conditions into their industries, particularly in oil and gas, power, transport and manufacturing networks and also implement reforms that will attract and facilitate foreign direct investment,” he added. For Johnson Chukwu, CEO, Cowry Asset Management Limited, the direction and the uncertain risks of the elections seem to have worsened the concerns and confidence of investors and created concerns about the possible outcome of the election. “The economy has been growing at a very sluggish rate since we came out of recession. And the growth of an economy is what drives FDI .Investors are looking for an economy where they will optimise their return and the lowest possible risk,” Chukwu said. A lot of blockbusters happened in

Nigeria’s business landscape in 2018, from a backlash between its apex financial regulator and its largest non-oil direct investor that controls about 39.7 per cent market share and service about 66 million subscribers in Nigeria’s telecommunication sector, to the closure of local offices of two global lenders. The CBN in August fined four banks a total of N5.86 billion for breaching Nigeria’s extant laws and forex rules when they facilitated illegal repatriation of funds to South Africa on behalf of MTN. The CBN then asked MTN Nigeria to immediately repatriate a total of $8.134 billion, being part of funds that were illegally taken out of Nigeria by the telcom company between 2007 and 2015. The telcom firm was also slammed US$2bn in tax arrears on imported equipment and payments to suppliers from the office of the Attorney General of the Federation. MTN and the banks involved denied any form of wrongdoing. This CCI fiasco sent a negative signal to investors who raised eye brows on the way and manner the apex bank handled the situation, pushing FDI to N379.84 billion($1.2

billion) in the first half of the year from 532.63 billion naira ($1.7 billion) a year earlier, according to CBN half year data. Global lender UBS closed its Nigerian office after it expressed dissatisfaction over the way and manner the apex bank brought its hammer on the telecom giant.

In the same manner, HSBC shut down its operations in Nigeria over several backlashes from the government after it predicted that Nigeria’s president Buhari’s victory in the 2019 elections would stall the economy. “We have noticed that a number of foreign investments are going into the oil and gas sector,” said Ayodele Akinwunmi, Head of Research, FSDH Merchant Bank. “However, in the last few years especially from the upstream a number of them are saying they are confused about the unclear policies in that area which they need to have to enable them invest,” he said. “Some of the bills on the oil and gas sector such as the Petroleum Industry Governance Bill is yet to be passed and this is constraining FDI,” Akinwunmi further said. In July, 2016, President Muhammadu Buhari established the Presidential Enabling Business Environment Council (PEBEC) to remove delays and unnecessary restrictions that come with doing business in Nigeria, making the country a place where one can start and grow a business. After moving 25 places up the ladder, Nigeria dropped a spot to 146th among 190 countries in the World Bank’s 2019 Doing Business Index (DBI). This is despite the country making an improvement in the ease of doing business score from 51.52 to 52.89.

Companies&Market

Andela raises $100 million investment OLUFikayo Owoeye

ormer U.S. Vice President Al Gore’s investment firm, Generation Investment Management is leading a $100 million Series D funding round in Software development firm, Andela. This will bring Adela’s venture capital haul to $180 million to date. Generation’s deal would be the third largest venture investment ever for an African startup. It would be recalled that in June 2016, Andela received funding from the Chan Zuckerberg Initiative and also raised an additional $40 million

in a third venture capital funding round in 2017, bringing its total capital raised to $80 million led by CRE Venture Capital, a South African Venture Capital firm, and backed by DBL Partners, Amplo, Salesforce Ventures, and TLcom Capital. This financing round is likely the largest done by an African VC firm. Andela commenced operations in Nigeria in 2014, to help global companies overcome the severe shortage of skilled software developers and invest in Africa’s top technical minds and has offices in Nigeria, Kenya, Uganda, and the United States.

CDC makes $15 million investment into CCAGF to support SMEs in Nigeria MICHEAL ANI

DC Group plc, a development finance institution owned by the UK government has invested some $15 million in a Nigerian-based private firm, Cardinal Stone Capital Advisors Growth Fund (CCAGF), to support highgrowth SMEs in Nigeria. CDC has worked closely with the CardinalStone Capital Advisors team for two and a half years and has played a key role in the formation of the fund,

the UK-based financial institution said in a statement on its website. “As a pioneering investor in African private equity we are delighted to be supporting CardinalStone’s first fund that will bring investment and expertise to the local entrepreneurs and high growth SMEs that are vital to Nigeria’s long-term economic growth and job creation. We have worked with CardinalStone from the beginning, helping them build a team and raise other investment”, Clarisa

de Franco, CDC’s Managing Director said. “CDC has invested in Nigeria for 70 years. The country plays a key part in CDC’s strategy of partnership and investment for economic growth in West Africa.” De Franco said in a statement. CCAGF is a first-time fund that targets SMEs across six sectors: agriculture, industrials, FMCG, healthcare, education and financial services. The Fund will invest in SMEs in Nigeria and Ghana, with a view to developing the targeted

SMEs into sector leaders by supporting them through a strategic and operational intensive investing approach Prior to the Fund, CardinalStone Capital Advisors made investments as the principal investment division of CardinalStone Partners and spun off into an independent fund manager in 2016 and plans to raise up to $100m in total commitments by the final close of the Fund. The CCA team was said to have been led by Yomi Jemibewon and Femi Ogunjimi.

Cardinal Stone Capital Advisors was not available for comment. CDC is an anchor investor alongside Kuramo, an African investment firm, and has helped mobilise additional investment of $15m from the Dutch development bank FMO and the Nigerian sovereign wealth fund (NSIA). The UK-based developmental financial institution says it plans to invest up to US$4.5bn across Africa over the next four years.

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FINANCIAL TIMES

World Business Newspaper

Qatar seeks to muscle its way back on to diplomatic stage Gas-rich state displays renewed confidence in defiance of Saudi-led embargo Andrew England

atar is seeking to reassert itself on the regional stage by wielding its financial clout and launching a flurry of diplomatic activity 18 months after it was rocked by a Saudi-led blockade intended to isolate the gas-rich state. Exuding renewed confidence underpinned by petrodollars, Doha has this month welcomed two foreign leaders desperate for financial support, offered $500m to embattled Lebanon, and hosted talks between the Taliban and the US. “They are starting to be punchy again,” said Neil Quilliam, a Gulf expert at Chatham House. “There will still be red lines about where they go, but they have weathered the storm [of the embargo] and they are certainly feeling confident.” Qatar’s renewed assertiveness has led it into arenas where Riyadh has for years been the dominant Gulf actor and comes as Saudi Arabia has been chastened by international outrage over the killing of journalist Jamal Khashoggi in October. The swirl of diplomacy is also signalling that Qatar feels it is over the worst of the financial impact of the Saudi-led blockade, which began in June 2017. When Saudi Arabia, the United Arab Emirates, Egypt and Bahrain cut diplomatic ties and transport links with Qatar, they accused Doha of sponsoring Islamist groups and terrorism. But it was widely seen as a heavy-handed attempt to rein in what they view as Doha’s nefarious meddling in regional politics and weaken its ties to Iran. During the first year of the blockade, Doha — which denies the

allegations against it — kept a low profile as it focused on stemming an economic crisis. It repatriated more than $30bn held overseas by the Qatar Investment Authority to stabilise the financial system; sought out new trade partners; and spent heavily on Washington lobbyists. Now Doha is once again using its financial muscle to build relations. Qatar last week announced that it planned to buy $500m in Lebanese bonds as that country grapples with a fiscal crisis. In doing so it was entering terrain where Saudi Arabia has for years been the main Gulf player as it seeks to counter the influence of Hizbollah, the Iran-allied Shia movement that has both political and military wings. Riyadh has held off providing Beirut a bailout as rival Lebanese groups, including Hizbollah, battle over the composition of a new government while Lebanon’s financial crisis deepens. But Qatar’s unexpected announcement drew a swift response from the kingdom, which promised to support Lebanon “all the way”. The same day, Imran Khan, Pakistan’s prime minister, touched down in Doha where he secured a pledge that Qatar would lift an import ban on Pakistani rice and welcome another 100,000 workers from the south Asian nation. Next up was Sudan’s embattled president, Omar al-Bashir, who chose Qatar as his first foreign trip after a wave of protests erupted last month against his autocratic rule. Both Pakistan and Sudan have also received financial aid from Riyadh and Abu Dhabi, while Khartoum has deployed troops in Yemen to back the Saudi-led coalition fighting Houthi rebels. Saudi Arabia and UAE are the

Big drop in US homebuilders’ shares could spell trouble Rising interest rates and structural pressures have dimmed the outlook for housing

Richard Henderson

he US housing market was at the heart of the financial crisis that rippled through the global economy a decade ago. Today, emerging cracks in a property recovery are darkening the outlook for housingrelated stocks — and possibly further afield. US house prices kept deflating until 2012, but since then they have climbed more than 50 per cent, propelled by a slowly-healing economy, falling unemployment and interest rates at record lows. That buoyed homebuilder stocks, with the Dow Jones Home Construction index, a $47bnin-market-capitalisation benchmark, delivering almost twice the return of the broader US stock market over the five years to 2017. But the bloom came off last year, as the index fell more than 40 per cent from peak to trough. While homebuilder stocks have enjoyed a welcome bounce over the past couple of months, they are still down 32 per cent from the top. Concerns over the sector — and what the deterioration means for the broader US economy — continue to swirl. “The psychology in the housing market has altered,” says Michelle Meyer, head of US economics for Bank of America Merrill Lynch. “That could be very forceful in dictating future volumes in home sales.” Indeed, the number of US homes sold fell to a three-year low in De-

cember, according to data released last week by the National Association of Realtors. The tumble, the secondsharpest month-on-month drop in home purchases since prices began to recover in 2012, may not have halted the recovery in housing stocks, but raises important questions over whether rising US interest rates are now biting into the real economy. The Federal Reserve lifted rates four times last year, nudging the cost of new mortgages higher, keeping would-be buyers at bay. The central bank has now turned more cautious, and analysts expect an easing in mortgage rates since November to coax back nervous purchasers in the crucial spring selling season that begins next month. Yet the long-term prospects for the sector remain more challenging. In addition to interest rates, more structural headwinds — including affordability after the dramatic rise in prices, unexpected demographic changes and the rising cost of construction — have dimmed the outlook for homebuilders. High prices have deterred younger buyers while older owners are staying in family homes, bucking expectations they will sell up for a smaller place in a warmer climate. “Baby-boomers are working longer and millennials are taking longer to move into a single-family home,” says Susan Maklari, an analyst with Credit Suisse in New York. Meanwhile, last year’s market ructions deterred wealthier buyers with assets tied up in stocks and bonds, she argues.

most influential Arab states, boasting the region’s largest economies, the most assertive foreign policies and the closest ties to the Trump administration. But “the region has opened up a little bit for Qatar in the wake of Khashoggi,” said Michael Stephens, head of Royal United Services Institute’s Qatar programme. “Saudi power projection is not what it was,” he added. “If you are an astute political leader in the region, and you need to boost your bank balances, you can play these countries off against each other.” A Gulf analyst, familiar with the thinking of Doha’s rivals, acknowledges that Qatar is becoming more active, but said it was a “paper tiger, with no depth or sustainable real power”.

“The common element of all of this is dollars, there’s no real political clout or intervention,” the person said. Riyadh and Abu Dhabi’s main concerns are Doha’s relations with Iran and Turkey. Yet their dispute — which has pitted US allies against each other and frustrated Washington — has pushed Doha closer to Turkish president Recep Tayyip Erdogan, who Riyadh and Abu Dhabi consider another irritant, and Iran, on whose airspace Qatar now depends because of the blockade. Doha is also reasserting its influence in Gaza, which is controlled by Hamas, the Islamist militant group. In November, it announced that it would provide $150m over six months to pay civil servants’ salaries in the impoverished Medi-

terranean strip. “Qatar is playing an active role in the mediation because we believe the diplomacy is the only way to address security challenges in the region,” said Thamer al-Thani, Qatar’s media attaché in the UK. “The stability of Qatar and the stability of the region are interconnected.” Still, analysts say Doha has learnt lessons and is likely to tread carefully. Qatar’s larger neighbours have long considered it a maverick bent on punching above its weight. But relations plummeted after the 2011 uprisings rocked the Arab world. Gulf states reacted by becoming more interventionist, getting involved in Egypt, Libya, Syria and Yemen, often with Qatar on opposing sides to Saudi Arabia and the UAE.

US unveils criminal charges against Huawei

China slams case as ‘unfair’ as prosecutors also charge telecom group’s CFO Meng Wanzhou Kiran Stacey and Tom Mitchell

he US has accused China’s Huawei of stealing American technology and breaking US sanctions against Iran, in a criminal indictment that sharply escalates the two countries’ technological rivalry. The move will overshadow trade talks this week aimed at averting an all-out trade war between the world’s two largest economies. Matthew Whitaker, acting attorney-general, announced the action against the world’s biggest telecoms equipment maker on Monday as China’s trade negotiators, led by Vice-Premier Liu He, arrived in Washington for talks scheduled to open on Wednesday. Depending on the penalties sought by the justice department, the Trump administration’s salvo could disrupt the global operations of a Chinese corporate champion and land its chief financial officer, Meng Wanzhou, in prison. Ms Meng is the daughter of Huawei’s founder, Ren Zhengfei, and is currently in Vancouver as she fights a US extradition request in Canadian courts. Canada’s justice department late Monday said it had received a formal extradition request from the US, the Canadian Broadcasting Corporation reported. Mr Whitaker told a press confer-

ence: “These are very serious actions by a company that appears to be using corporate espionage and sanctions violations not only to enhance their bottom line, but also to compete in the world economy. This is something the United States will not stand for.” He added: “This goes back 10 years and goes all the way to the top of the company.” Huawei said it was “disappointed to learn of the charges brought against the company today”, adding that it had sought discussions with the US justice department after Ms Meng’s arrest but “the request was rejected without explanation”. “The company denies that it or its subsidiary or affiliate have committed any of the asserted violations of US law set forth in each of the indictments, is not aware of any wrongdoing by Ms Meng, and believes the US courts will ultimately reach the same conclusion,” the Huawei statement added. The Chinese government on Tuesday also rejected the charges. “It is neither fair nor ethical to use state power to discredit and attack specific companies without any evidence,” said a spokesman for the Ministry of Industry and Information Technology. He added that Chinese companies were always encouraged to work in foreign countries in accordance with “international rules and on the basis of compliance with local laws”.

US unveils criminal charges against Huawei Shi Yinhong, an international affairs expert at Beijing’s Renmin University, said the charges revealed the Trump administration’s determination to “strike China’s technological development” and retain its grip on the “commanding heights” of key technology sectors. US officials said the investigations into Huawei had been going on for years. But they began to come to a head in December, when Canadian officials arrested Ms Meng in Vancouver on US charges, a move that triggered protests from China, which has since detained at least two Canadian citizens. Mr Whitaker said the US would formally lodge an extradition request with Canada in the coming days. Ms Meng’s arrest is a particularly sensitive political issue given Huawei’s status as a Chinese national champion. Eswar Prasad, a professor of trade policy at Cornell University, predicted the charges would make an eventual trade deal less likely. “These actions will ratchet up bilateral tensions ahead of the upcoming trade talks and could presage a hardening of positions on both sides,” he said. “Beijing will no doubt feel compelled to reconsider its willingness to make concessions in order to strike a deal.”

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NATIONAL NEWS

FT How online platforms shook small-business lending in America

Kabila to pull strings in Congo parliament after flawed vote

New names step up to fuel America’s engine as capital-strapped banks pull back

FCC will have wide-ranging powers including ability to select next prime minister

Robert Armstrong

Tom Wilson

n the years after the financial crisis, small businesses that needed credit were stuck. New capital rules discouraged big banks from touching any borrower perceived as risky. The bond and loan markets, where larger businesses flocked for inexpensive debt capital, have little use for sums under $100,000 — which is what most small enterprises need. A handful of non-bank lenders, payment and e-commerce companies have leapt into the gap. In an environment of easy money and economic expansion, small business lending operations at OnDeck, Kabbage, PayPal, Square and others have grown fast. The question now is whether these new, branchless business models can thrive in a market where credit is tightening and the economy slowing. The interest rates on the loans are high — often the equivalent of a 30-40 per cent annual rate, or higher — and the borrowers tend to have short credit histories. There are some signs of vulnerability. Morgan Stanley analyst James Faucette notes that in periods where credit has tightened in recent years, the online lenders “have done worse than traditional lenders . . . they have all had to rework their underwriting in a significant way. Once they have done that, they try to re-engage during an expansion and take advantage of what they have learnt.” The lenders themselves say they have found an under-served market and that new data sources mean they can underwrite risks that were previously too hard to capture. “FICO [credit scores] are a great predictor of consumer credit performance, but there is no FICO for small-business lending . . . so what banks have been doing to underwrite a loan is expensive,” says Kevin Phillips, head of commercial development at the online lender Kabbage. As a result, “small loans are not economic for them,” creating a big opportunity. Real-time access to bank account, tax, credit and other data means lenders can assess their small business “continuously” says Eyal Lifshitz, chief executive of BlueVine, which has originated $1.5bn in lines of credit and loans against receivables to date. “We underwrite the accounts every day,” not just when the loan is made, he says. The sums handed out by this new class of business lender are considerable and growing rapidly. New York-based OnDeck, which started lending in 2008 and is a trailblazer in this area, carries $1.1bn in loans on its balance sheet and originated $650m of loans in the third quarter, up a fifth from the year before. Privately held Kabbage, founded a decade ago, has lent out a total of $6bn, $2bn of that in 2018. The lending division at payment company Square — now five years old — has made $3.5bn in loans so far. The lending unit of PayPal provided $1bn in credit to businesses in the third quarter last year alone.

A host of countries, including most of Venezuela’s neighbours and the US, have recognised Juan Guaidó as the country’s legitimate temporary leader © Reuters

Goldman and BlackRock among winners as Venezuelan bonds surge The possibility of Nicolás Maduro’s government falling has raised hopes among the country’s creditors Robin Wigglesworth and Colby Smith

he rally in defaulted Venezuelan bonds sparked by hopes of regime change has handed some juicy early-year gains to the country’s biggest creditors, such as BlackRock, T Rowe Price, Stone Harbor and Goldman Sachs Asset Management. Last week, Venezuelan opposition leader Juan Guaidó declared himself interim president, arguing that the government led by Nicolás Maduro is illegitimate. Subsequently, a host of countries, including most of Venezuela’s neighbours and the US, have recognised Mr Guaidó as the country’s legitimate temporary leader. Venezuela has defaulted on almost all its debts since November 2017, and US sanctions mean that negotiating a restructuring is in practice impossible — leaving bondholders in limbo. But optimism that the stasis could soon be broken has triggered a big rally in its debt. “The chances of Maduro leaving have now ramped up, in which case the potential for the country to rebound economically and for oil production to come back is

going to be much higher,” said Anthony Simond, a fund manager at Aberdeen Standard Investments, which holds Venezuelan debt. “The recovery rates on the defaulted bonds are set to be very large.” The prices of Venezuela’s government bonds have jumped from about 23 cents on the dollar earlier this month to over 33 cents on Monday, while bonds issued by PDVSA, the state oil company, have climbed from roughly 14 cents on the dollar to around 24 cents. While these still beaten-up prices underscore the risks and the long path that lies ahead for Venezuela, even if this proves to be the beginning of the end of the “Chavismo” regime first established by Hugo Chávez, the bounce has helped buoy several big emerging market bond funds. Stone Harbor’s $1.2bn Emerging Market Debt Fund, managed by Jim Craige, has gained 5.9 per cent this month, Mike Cornelius’ $6bn T Rowe Price Emerging Markets Bond Fund has returned 5.4 per cent, and BlackRock’s $2.7bn EM bond fund — led by Sergio Trigo Paz — has gained 5.2 per cent, according to Bloomberg data. The performance of these funds, all prominent on the list of Venezuelan creditors, outstrips

that of JPMorgan’s EMBI Global index of developing market bonds, which has gained 3.8 per cent so far this year. “These returns are extraordinarily good,” said Edward AlHussainy, a strategist at Columbia Threadneedle. Another big winner from the recovery in the value of Venezuelan bonds is Goldman Sachs Asset Management, which courted controversy in 2017 when it paid $865m for PDVSA bonds previously held by the central bank. This threw a financial lifeline to the Maduro administration and attracted condemnation from the Venezuelan opposition and some US politicians. Two Goldman EM debt funds managed by Ricardo Penfold, the portfolio manager that did the 2017 PDVSA deal, are also among the industry’s best performers this year. The $8.2bn GS Emerging Markets Debt Portfolio is up 4.8 per cent in January, while the $1.9bn Goldman Sachs Emerging Markets Debt Fund has gained 5.1 per cent. “The most important thing is bringing an end to the humanitarian, economic, and political crisis afflicting that country, which we expect would have some impact on the assets we hold for our clients,” a spokesperson for Goldman said.

Beauty firm launches Topicrem to tackle skin diseases in Nigeria

s part of effort in correcting the anomalies and guarantee a nourished, healthy and beautiful lifestyle, a new brand of skin care products, Topicrem has berthed in Nigerian market. The product, which according to the sole distributor, Joseph Udeh Chairman and Chief Executive Officer, Jauf Health and Beauty International, will not only help in addressing all kinds of skin related problems but also ensure Nigerians avoid harmful substances capable of destroying the skin. Following a renew called from the Nigeria government on the dangers of whitening or bleaching creams, the new product will no doubt come as a welcome relief for Albinos , and those suffering from bleaching cream reactions. Topicrem which was made in France, according to Udeh and has been carefully formulated to address all kinds of skin related problems, while also boasting of the product’s ability to take care of skins of new born babies.

Addressing journalist recently in Lagos, Udeh described the brand as an effective, simple and safe product that is very gentle, convenient and a particularly well-tolerated formula fluid and non-oily emulsion with a high moisturizing and lipid-replenishing power that instantly penetrates the skin without feeling sticky. “Present in over 40 countries, Topicrem he said is a genuine revolution that has taken into cognizance safety, effectiveness and comfort to ensure skincare and gentle hygiene for the whole family’s sensitive skin, for an affordable price” he stated. He further noted that the product has been tested and certified by international dermatologist across the globe, saying that as the sole distributor in Nigeria, his mission is to take the quality brand to all leading supermarkets and pharmacies in Nigeria and the West African markets. “Our flagship product which is the ultra-moisturizing body milk takes care of unwanted dry cells and it is our goal to make this brand the number one preparation in Nigeria

and the entire West Africa. It helps to ensure 24 hour hydration. We also have the massage oil for babies to ensure penetration and softness of the skin. We also have products that can be used to repair damaged skin and many more are all available in the stable of Topicrem,” he said. He also said plans are underway to exhibit the products during the 25th anniversary of the Government regulatory Agency, National Agency for Food, Drug Administration and Control [NAFDAC] which he said would also serve as an endorsement by the regulatory body to declare the brand fit for the Nigerian market. “We are going to be visiting beauty Spas as part of our launch strategy in ensuring that we have this brand in every supermarket across the country and in all leading pharmacies in Nigeria and with time, we are going to have our own share of the market. We also have other brands which take care of people that exhibit albinism and we have gone the extra mile to ensure that everybody is covered,” he added.

utgoing president Joseph Kabila’s coalition will continue to exert huge influence on the future of the Democratic Republic of Congo after winning a suspect parliamentary election, in which some vote tallies were not even counted, according to three senior Congolese politicians. Mr Kabila’s Common Front for Congo or FCC will have wideranging powers in the new parliament, including the ability to select the next prime minister, influence the appointment of multiple cabinet ministers and even approve constitutional changes. The FCC also won a majority of seats in provincial assemblies, which will elect governors and senators who, in turn, will probably give the FCC control over who becomes senate president. The parliamentary election was held on the same day as the presidential vote, which was widely believed to be rigged in favour of new President Felix Tshisekedi. The politicians’ allegations of further political interference pointed to an electoral process that was closely managed by Mr Kabila’s entourage from start to finish. Even with a tightly controlled race, Mr Kabila was unable to deliver a victory for Emmanuel Shadary, his chosen successor, in the presidential election but in the parliamentary vote his coalition won as many as 350 out of 500 seats in the National Assembly, according to party officials. “It’s the prime minister that runs the government day to day, and with continued control of the army and the security services, the FCC will not be giving up power,” Samy Badibanga, Congo’s prime minister from 2016 to 2017, told the Financial Times. While the presidential vote was widely scrutinised, the lessstudied parliamentary results were equally alarming and will have greater consequences for the future of the country, according to Mr Badibanga, who ran for president and for a parliamentary seat but lost both races. “Until today, with regard to the parliamentary elections, we don’t really know what were the results,” Mr Badibanga said. He believes that the ballot papers were never counted in his constituency. “Where do the results come from? They’re imaginary results,” he said. The electoral commission announced the winners of parliamentary seats but provided no further information and did not publish the number of votes for each candidate. In December, voting machines, which sent electronic tallies to a central database, in most cases within 24 to 48 hours, gave a handful of senior election commission officials the results days before anyone else. The official figures, however, were meant to be calculated from the ballot papers that were printed by the devices, counted by hand in polling stations and then compiled in more than 170 centres around the country.

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UK financial watchdogs seek to shore up post-Brexit EU accords Regulators negotiate with bloc so they can continue to share data in no-deal scenario Caroline Binham

he UK’s two financial regulators are negotiating agreements with European authorities so that they can continue to share information in the event of a no-deal Brexit. Andrew Bailey, the head of the Financial Conduct Authority, revealed the negotiations on Tuesday during testimony to the Treasury select committee, alongside John Glen, the City minister, and Sam Woods, chief executive of Prudential Regulation Authority. The FCA and PRA are in negotiations with not only the European supervisory authorities such as the European Banking Authority but also national financial regulators across the other 27 member states of the bloc. The select committee is scrutinising the “unprecedented” powers given to the Treasury, the FCA and the Bank of England’s Prudential Regulation Authority to keep financial services open for business, even in the hardest of Brexits. The “statutory instruments” allow them to push through any changes deemed necessary without the normal parliamentary checks and balances. “Sam and I are in the business of negotiating MoUs with the EU authorities in the event this situation comes to pass to enable us

to have access to information to enable us to do our job, and we obviously take that very seriously,” Mr Bailey said on Tuesday. His comments come 59 days before the UK is scheduled to leave the EU and as MPs prepared to vote on measures that Theresa May, UK prime minister, is putting forward in an effort to break the impasse since a heavy defeat this month on the withdrawal deal she struck with the rest of the EU. Mrs May told MPs on Tuesday that she would seek to reopen the divorce deal. The financial watchdogs have been responsible for the “lift and shift” of EU rules into UK legislation as a first step to cope with how Brexit will change financial regulation in the UK. On Day One of Brexit, the rule book should look the same but for elements known as “inoperables” that cannot be copied — for instance, any reference to EU watchdogs having direct oversight of UK-based companies. This “massive operation” has meant regulatory changes running beyond 2,000 pages of rules, each page containing many changes, Mr Woods said. Mr Glen told the committee that despite the “call” of Frankfurt, jobs and operations shifting from the City of London to the EU had been “modest”.

Greece raises €2.5bn in bond-market comeback Finance minister says issue ‘exceeded all expectations’

Katie Martin and Kerin Hope

reece has raised €2.5bn in a carefully choreographed return to the international bond markets, riding a wave of goodwill after its recent diplomatic efforts over Macedonia and making the most of supportive market conditions. The five-year bond, the country’s first since emerging from its third international bailout programme in August, had a coupon rate of 3.45 per cent and yield of 3.60 per cent. Fi na n c e m i n i s t e r Eu c l i d Tsakalotos said the issue had “exceeded all our expectations.” He added that “it was very positive” there were so many long-term investors, which significantly reduced the number of hedge funds participating. Valdis Dombrovskis, European Commission vice-president, said Greece’s return to the markets was “a very delicate task”. After nine years without regular borrowing and saddled with a debt equal to 180 per cent of GDP, Greece “doesn’t have much room for manoeuvre and not much room for mistakes”, he said. Still, the deal is priced to sell — an important factor for Greece, which needs to show investors it can access the markets. German debt of a similar maturity trades

with a yield of 0.3 per cent below zero, meaning buyers take a nominal loss for holding the debt to maturity, while Italian five-year debt yields around 1.6 per cent, which means the premium for the Greek debt is substantial. James Athey at Aberdeen Standard Investments said he did not intend to participate in the deal, noting that even with yields at that level, the potential volatility over the course of what is likely to be a challenging year for the eurozone was too much for him to stomach. But he said the downturn in the region’s economy meant there is a “’grabathon’ for yields” among many investors at the moment. “For Europe, that’s a massive number, so this deal will get away,” he said. “It is a step back towards normality” for Greece, he added. Investors appear receptive to new opportunities; a record €10bn issue of Italian debt this month met with huge demand. In fact, fellow bailout recipient Cyprus on Tuesday announced plans to issue new debt. Representatives of the island will visit London and other major European cities next month. Successful efforts by Greece’s minority Syriza government to change the name of Macedonia, ending a 28-year dispute, has also proven to be a boost for Greek debt.

US stocks stabilise as earnings rush continues US criminal charges against Chinese telecoms group add to concerns over trade talks Edward White

S stocks made a steadier start after falling sharply on Monday as the mood was helped by well-received earnings from the likes of 3M and Xerox, although Pfizer lost ground after it delivered soft guidance for the year ahead The S&P 500 was up 0.2 per cent 2,648 following the previous session’s 0.8 per cent drop. The Nasdaq Composite was 0.1 per cent lower. Sentiment was soured on Monday after chip designer Nvidia and construction equipment group Caterpillar flagged worsening outlooks for the Chinese economy European equities pushed higher as participants largely shrugged off news that criminal charges had been filed by US authorities against Chinese telecoms group Huawei combined to unsettle investors. The charges against Huawei and one of its leading executives, Meng Wanzhou, ratchets up tensions between Washington and Beijing ahead of critical US-China trade talks that investors hope will turn a temporary truce into something permanent. In Europe, the benchmark Stoxx Europe 600 was up 1.1 per cent, while the Xetra Dax in Frankfurt gained 0.4

per cent. The FTSE 100 outperformed, with the UK’s blue-chip index up 1.5 per cent. Equities Stocks in Shenzhen turned sharply lower, with the Shenzhen Composite slumping as much as 2.6 per cent before trimming those losses to 1.4 per cent. All sectors were in negative territory but telecommunications stocks were worst hit, followed by falls for the technology and industrial segments. The CSI 300, tracking the biggest listed companies in Shanghai and Shenzhen, was down 0.1 per cent after earlier losing 1.1 per cent. The Hang Seng index was off 0.6 per cent. Asia-listed heavy machinery stocks slumped after Caterpillar flagged only a modest global sales rise and no growth in China. The US-listed industrial bellwether’s warning added to fears over the slowdown in the Chinese economy and sparked a sharp sell-off on Monday, with the stock closing down 9 per cent on the day. Chipmakers in the region were also lower in the wake of Nvidia’s drop, with Samsung Electronics and Taiwan Semiconductor Manufacturing in negative territory. Forex Japan’s yen, traditionally a haven during market uncertainty, was steady

at ¥109.38 against the dollar while the euro was down 0.1 per cent at $1.1416. The dollar index, measuring the greenback against a basket of peers, was little changed at 95.78. Sterling was up 0.1 per cent against the dollar at $1.3180 — and 0.2 per cent firmer versus the euro at €1.1538 — as participants awaited the outcome of MPs votes on a series of amendments to prime minister Theresa May’s Brexit plans later in the day. The onshore renminbi, which trades within a trading band of 2 per cent in either direction of a midpoint set each morning by the central bank, was basically unchanged at Rmb6.7434 per dollar. The offshore rate, not bound by any trading band, slipped 0.1 per cent to Rmb6.7592. Fixed income The yield on benchmark US 10year Treasuries was down 1 basis point at 2.73 per cent, while that on the equivalent German debt was flat at 0.20 per cent. Commodities Oil prices moved higher. Brent crude was up 2.3 per cent at $61.33 a barrel, while West Texas Intermediate, the US benchmark, added 3.3 per cent to $53.70 a barrel. Gold was up $6 at a seven-month high of $1,310 an ounce.

Mexico to ease Pemex tax burden in bid to boost company Jude Webber

exico is easing the tax burden for Pemex, the state oil company, to free up more cash to boost flagging production, the government says. Noting the company’s high tax burden, President Andrés Manuel López Obrador told his morning news conference the move would allow Pemex to have “more to invest” in its operations.

The finance ministry late on Monday announced a plan to free up some $580m a year for Pemex by increasing the limit for deducting costs relating to exploration and production projects. The finance ministry said it would achieve that by bringing deductions into line with the terms of auction rounds held by Mexico from 2015 to 2018. “The finance ministry estimates that this mechanism will free up about 11bn pesos ($577m) for Pemex every year to reach a total of 66bn available

to invest in 2024,” it said. The cash would have to be spent on capex, it added. The ministry said Pemex would also get a special tax regime for secondary and tertiary recovery — the practice of squeezing more hydrocarbons out of mature fields. Changes to Pemex’s tax regime were notably absent from the 2019 budget but the ministry said it would fund them by boosting the fight against tax evasion.

US home prices grow at slowest pace in nearly four years Rising mortgage rates blamed for slowdown in closely watched index Matthew Rocco rowth in US home prices continued to ease in November with 20 major markets recording their slowest ascent in nearly four years, according to the latest S&P Corelogic Case-Shiller report. The group’s 20-city composite index rose 4.7 per cent year-on-year when seasonally adjusted, down from 5 per cent in the previous month. It was the index’s weakest growth rate since January 2015. The 10-city composite index rose 4.3 per cent, down from 4.7 per cent.

The national home price index registered a 5.2 per cent gain, compared with 5.3 per cent growth in October and marking its smallest annual increase since October 2016. Home prices in the US have risen amid a limited supply of homes for sale and a lacklustre pace of construction. David Blitzer, managing director and chairman of the index committee at S&P Dow Jones Indices, noted that new home construction trends are flat to down since they peaked in late 2017. Mr Blitzer said low inventories continue to support pricing, and the

slower pace of home price increases in November coincided with softer existing home sales as higher mortgage rates kept potential buyers on the sidelines. More recently, mortgage rates fell to about 4.45 per cent from 4.95 per cent after the Federal Reserve’s December policy meeting, Mr Blitzer said. Only seven cities in the Case-Shiller 20-city index recorded stronger annual price increases in November when compared to the prior month. Las Vegas led all 20 cities with a 12 per cent gain, while Phoenix home prices were up 8.1 per cent.

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ANALYSIS

Federal Reserve seeks to be steadier guide after market squalls Chairman Jay Powell will probably urge patience as central bank gauges policy steps Sam Fleming

Germany: Angela Merkel’s tarnished legacy on the environment The country’s green credentials are under scrutiny

Tobias Buck

here is a stretch of land close to the Polish border where the triumph and tragedy of Germany’s environmental policy can be viewed in startling proximity. Tucked away in a pine forest just east of Cottbus is Lieberose, one of the largest solar power plants in the country. Built more than a decade ago, with the help of generous green subsidies the plant’s 900,000 photovoltaic panels produce enough clean power to supply 20,000 households. Sparkling silently in the winter sun, the whole plant needs just 10 workers to keep it running. Beyond the treetops, however, a thick white cloud hangs permanently in the sky. Its source is the nine cooling towers at Jänschwalde, a conventional power station that runs on lignite, or brown coal, one of the dirtiest fuels around. By some counts, it is the plant with the fourth-biggest emissions of carbon dioxide in Europe. The lignite itself is brought from an opencast mine a few kilometres away. Viewed from the edge, the mine resembles a vast moon crater, lifeless except for the towering excavators and spidery conveyor belts that operate far below. In the region that surrounds Cottbus, more than 8,000 workers depend on jobs in the lignite mines and the power plants that use the fuel. Sun versus coal, renewable versus conventional, climate and environment versus jobs and the economy — Germany has struggled for years to chart a path between these poles. The country has long thought of itself as a green pioneer, setting the pace on issues such as nuclear power, climate change and renewables. Yet the German economy also remains heavily dependent on the car industry, and fuel sources such as lignite. The challenge in reconciling the country’s industrial demands with its environmental ambitions has rarely been harder — and has become a defining issue for Chancellor Angela Merkel as she enters her final phase in office. On Saturday a government commission unveiled a plan that calls for the phasing out of coal and lignite power in Germany by 2038. The long transition period reflects the critical importance of coal to the national economy, but is also intended to give affected regions such as Cottbus time to prepare for the inevitable economic loss. At heart, however, the phaseout plan is designed to help Germany achieve its ambitious 2030 climate targets, and restore the country’s green credentials after years of setbacks. The question facing German leaders now is: can they deliver on that promise?

“What happens in Germany will send out a signal. People are saying: ‘If a country with the wealth and industrial base of Germany is not able to exit coal in an efficient manner, then how can we do it?’,” says Ottmar Edenhofer, director of the Potsdam Institute for Climate Impact Research. “The world is looking at us. We have 10 years to solve the coal problem. What is on the line is Germany’s international credibility.” In 2000, Germany became the first big economy to place an allin bet on wind and solar power, passing a much-copied law that offered high guaranteed feed-in tariffs for renewable energy. The move sparked a wind and solar boom that gathered pace under Ms Merkel. When she took office in 2005, renewables accounted for 10 per cent of the electricity generated in Germany. In the years since, that figure has soared to 40 per cent. Now the Merkel government is plotting the next step, with an official target to lift renewables to 65 per cent of the energy mix by 2030. Since Ms Merkel became chancellor, Germany has committed to closing all its nuclear plants by 2022, invested hundreds of billions of euros in renewable energy and emerged as a pivotal leader in the multilateral effort to combat climate change. Ms Merkel, a trained scientist and former environment minister, has played a key role in all of these efforts, earning herself the sobriquet of the “climate chancellor”. But as the Merkel era draws to a close — she will not contest the next election, in 2021 — a different narrative is taking shape. Critics point out that, despite all the cost and effort of Germany’s renewables push, the country’s carbon dioxide emissions are barely changed from a decade ago. Last year, Berlin was forced to admit that it would not meet its climate target for 2020, which foresaw a reduction in CO2 emissions by 40 per cent from 1990 levels. The failure dealt an embarrassing blow to the country’s standing as a climate champion, and confirmed suspicions among environmental activists that Germany was no longer the strong ally of old. Tina Löffelsend, director of climate policy at Bund, a German environmental organisation, says the feeling among green campaigners today is increasingly one of “disappointed love” towards Ms Merkel: “She started promisingly but in the last 10 years nothing has happened in terms of CO2 reductions.” In Brussels, campaigners have long complained that Berlin tries to block or water down environmental legislation that displeases the country’s powerful car indus-

try or other industry lobbies. At the multilateral level, admiration for Ms Merkel’s record of leadership has given way to exasperation at Germany’s unwillingness to agree a speedy phase-out of coal and lignite. And, closer to home, the air quality in dozens of German cities is so poor that courts have started imposing bans on diesel cars. As she enters the final years of her tenure, Ms Merkel’s legacy as the climate chancellor has rarely looked more tarnished. “Merkel has been a champion of the Paris agreement and the multilateral framework to deal with climate change in general,” says Jennifer Morgan, executive director of Greenpeace International. “But if you look at her record in Germany, you see that the country has missed its emissions targets and that emissions continue to rise in the transport sector. And then there is the coal issue.” The question of how and when to exit coal has long been among the most contentious political and economic issues in Germany. Business leaders have voiced fears that a rapid phase-out will further raise already high electricity prices, and increase the risk of black-outs. Lignite accounts for more than a fifth of electricity production, and provides jobs to more than 20,000 workers. Plants such as Jänschwalde — which supply lots of cheap, reliable power around the clock — play a crucial role in an energy system that German industrial groups such as Siemens, Daimler and BASF depend on. “Germany’s prosperity depends to a large extent on the competitiveness of energy-intensive businesses,” Steffen Kampeter, the managing director of the German employers’ federation, warned ahead of the weekend coal deal. Affordable power and the security of supply were “paramount” for the national economy. Environmental campaigners, meanwhile, have long argued that a speedy shutdown of coal and lignite-fired power plants is the only way for Germany to meet its CO2 reduction targets for 2030, which are even more ambitious than the 2020 goals. Over the next 11 years, Germany is required to reduce its overall CO2 emissions by 55 per cent compared with 1990, with individual targets for every sector of the economy. The plan presented this weekend seeks to balance those competing interests, in part by throwing vast amounts of money at regions, companies and households: affected coal regions are supposed to receive €40bn over the next 20 years. Agreeing on a phase-out plan for German coal was hard — implementing it will be harder still.

aving contributed to a squall in financial markets late last year, the Federal Reserve will be aiming to chart a steadier course at its first rate-setting meeting of 2019, keeping interest rates unchanged and hammering home chairman Jay Powell’s determination to be “patient” on policy. The Fed will probably hold the target range for the federal funds rate at 2.25-2.5 per cent on Wednesday, following an upward move in December. Among the key questions going into the meeting is whether the Fed further waters down its current guidance telling investors to expect further rate rises, and when Mr Powell is ready to give a clearer signal on how much further the Fed’s multitrillion-dollar balance sheet will need to shrink. The rates decision will come at 2pm US eastern time, followed by a press conference as the Fed chairman begins his new practice of speaking to the media after every policy meeting. What will the Fed’s main message be?

Grant Thornton. How will the statement change? The key phrase from the Fed’s December meeting was a statement that the central bank “judges that some further gradual increases” in rates were merited. But increasing risks to global expansion and worries about trade conflicts have made the outlook less certain, which may mean the Fed wants to convey less conviction about future conditions. One option would be to formalise the Fed’s message of “patience” by putting it in the post-meeting statement. Rather than tying its hands with this kind of calendar guidance, however, policymakers could instead opt for language they deployed in 2006, said Michael Feroli of JPMorgan Chase. This states that “the extent and timing of any additional firming” in rates will depend on the economic data. The Fed will probably remain optimistic about the domestic US economy, but its statement may sound a shade less bullish than in December — especially after delays in statistical releases resulting from the federal government shutdown reduced clarity about the economy’s

Jay Powell this month sought to reassure Wall Street that he would not hesitate to change the Fed’s balance sheet policy if needed © Bloomberg

The central bank considers the US economy to be in a healthy state, but tepid inflation is allowing policymakers to take their time before deciding what to do next with interest rates. Decelerating growth overseas is only adding to arguments for caution. The five-week federal government shutdown, which ended on Friday, will probably dent growth a little in the current quarter, according to the Congressional Budget Office, but one key impact for the Fed is that it has interrupted the flow of key data releases, including gross domestic product and retail sales. This adds to the arguments for the Fed to tread carefully as it assesses the strength of the expansion. Late last year shifting signals from Mr Powell contributed to an unsettled spell in financial markets, as traders fretted that the US central bank was overly hawkish. The Fed chairman added to investor angst in December by suggesting the reduction of the Fed’s balance sheet was on automatic pilot, and by making only minor tweaks to its guidance signalling further rate rises. This year the messaging from Mr Powell and his colleagues has been much more consistent: investors should expect the central bank to be “patient” as it gauges what next to do on policy — which suggests rates will probably stay on hold until at least the summer. “The goal is to fly low and go under the radar,” said Diane Swonk, chief economist at

performance. What about the balance sheet? Investors have been critical of the Fed’s balance sheet reduction programme, as some argue that it is worsening volatility in the stock market. Fed officials question the logic of some of these complaints, but Mr Powell this month sought to reassure Wall Street that he would not hesitate to change the balance sheet policy if needed. One looming question is whether the Fed wants to continue to use its current system for setting rates, which entails a large balance sheet with abundant commercial bank reserves, or rather go back to the pre-crisis method of setting interest rates, which relied on there being scarce reserves. Key Fed policymakers have been signalling that they are inclined to keep the current system, and this week’s meeting may provide an opportunity to make that clear. Policymakers also need to decide when to give a firm steer on just how large that balance sheet will need to be. Bill English, a Yale professor who used to be the director of the Fed’s division of monetary affairs, is not sure the Fed is ready yet. “They are feeling their way and seeing how the reserves market reacts,” he said. But he added: “My read of the minutes is they seemed at least mostly to be comfortable with the idea that they will implement policy with a big balance sheet — bigger than they thought.”

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Angola: Eni starts new production well offshore Angola Page 56 GAS

Libya: NOC cuts off gas supply to JV with Norway’s Yara Page 57 Market Insight

L-R: Frank Edozie, MD/CEO, Neconde Energy Limited; Nnenna Obiejesi, group executive director, Obijackson Group; Chizor Malize, CEO, Brandzone Consulting LLC & Ikeazor Okonkwo chief financial officer, Nestoil Limited at the Brand Innovation Workshop organized by Brandzone LLC recently in Lagos.

Debrief

Nigeria’s political tension could be a catalyst for $100 oil FRANK UZUEGBUNAM

Oil climbs on Venezuelan crisis despite surging US Page 61 OPEC weekly basket price DAY

PRICE

24/1/19

60.22

23/1/19

60.52

22/1/19

60.66

21/1/19

61.49

18/1/19

60.9 Source: OPEC

he rising political tension in Nigeria in addition to other geopolitical tension across the world could be the catalyst for $100 per barrel of crude oil to arrive sooner than ever projected. The upcoming elections give cause for concern which could result in pockets of violence, enough to disrupt operations. The volatile campaign season ahead of upcoming elections is drawing up more tensions. The suspension of the Chief Justice of Nigeria, Justice Walter Samuel Nkanu Onnoghen by President Buhari have heightened tensions and has been termed the highest tension point as the elections draw

closer. The action has drawn widespread criticism and ire of Nigerians. There were also coordinated responses from the US, UK and EU expressing concerned about the process and timing of the suspension of the Chief Justice of Nigeria. NGOs and some politicalsupport groups in Nigeria are threatening to shut down the country. There are unconfirmed reports of resumed militant attacks in the Niger Delta in addition to notices for resumed hostilities which in a way could lead to some shut-ins and vandalization of pipelines and other oil installations. Already, deepening crisis in Venezuela might take out over 500,000 barrels a day of world oil supplies. The United States signalled it may impose sanctions on Venezuelan exports

after recognising opposition leader Juan Guaido as interim president, prompting President Nicholas Maduro to cut ties with Washington. Crude has rallied 18 percent so far in January, set for its best month since April 2016, as the Organization of Petroleum Exporting Countries (OPEC) and its allies started fresh output cuts. Brent crude oil futures were at $61.62 a barrel or 0.9 percent, above their last close while US West Texas Intermediate (WTI) crude futures were at $53.70 per barrel, up 57 cents, or 1.1 percent. Fundamentally, however, global oil markets are still well supplied with surging output in the United States, where crude production rose by more than 2 million barrels per day (bpd) last year to a record 11.9 million bpd.

According to Wood Mackenzie’s latest price forecast, Brent will average $65 per barrel in 2019 and $68 per barrel in 2020. Earlier this month, analysts at Fitch Solutions Macro Research (FSMR) forecasted that the price of Brent will average $75 per barrel in 2019. FSMR analysts see the average price of Brent rising to $82 per barrel in 2020, $84 per barrel in 2021 and $85 per barrel in 2022. Record US production would likely offset potential disruptions in Venezuela and maybe Iran and Libya. Analysts have predicted a more balanced market due to a production cut pact by the OPEC and its allies including Russia but the unfolding political tension in Nigeria could worsen the situation and fast track the journey to $100 per barrel.

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anda and 130 km west of Soyo, in the West Hub of Block 15/06, in Angola’s offshore. The start-up of the VAN-102 well, which follows the start-up of

Wednesday 30 January 2019

oil

Angola: Eni starts new production well offshore Angola

ni has successfully launched a new production well in the Vandumbu field, about 350 km north-west of Lu-

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the second Subsea Multiphase Boosting System (SMBS), took place through the N’Goma FPSO and achieved a performance of about 13,000 bbl. VAN-102 is a further

Brief WAF Crude: Bonny Light, Qua offered at highest since mid-2014 step in the development of the Vandumbu field, launched on November 29, 2018, 3 months ahead of schedule, and which will be completed in first-quarter 2019 with the start-up of the water injection well. This, together with the start-up of another production well in the Mpungi field, will bring the production of Block 15/06 to a total of about 170,000 boed, further extending the production plateau. These start-ups mark the progress in the phased and clustered development strategy that Eni has adopted for Block 15/06, and which has allowed the start-up of eight fields since November 2014, when production in the West Hub started with the Sangos field. Block 15/06 is developed by a Joint Venture formed by Eni (36.84 percent, operator), Sonangol P&P (36.84 percent) and SSI Fifteen Limited (26.32 percent). Eni has been present in Angola since 1980 and currently has an equity production of around 150,000 boed.

he Nigerian crude market remained strong with sellers feeling confident enough to offer Bonny Light and Qua Iboe around their highest in over 4 years, while Angolan continued to trade at a brisk clip. An unplanned outage in Libya, reduced exports from Algeria and a smaller export programme for Kazakhstan’s CPC Blend, as well as an OPEC-led supply cut have helped to boost differentials for lighter West African grades. There is also strong demand from refiners in both Europe and Asia for distillate-rich grades have pushed up differentials for a number of key crudes to multi-month, or in the case of Nigeria, multi-year highs. Bonny Light and Qua Iboe were offered as high as $2.50 a barrel above dated Brent, although two traders said buyers were reluctant to step in at these levels, which are the strongest for these two grades since June 2014, according to Refinitiv Eikon data. Repsol was said to have loaded a cargo of Qua Iboe bound for their refinery in Peru. The Spanish group previously took Amenam to the 117,000-barrel per day La Pampilla refinery.

Meanwhile, less than half of the Angolan March loading programme was said to be available for sale on the spot market following the term allocations by state company Sonangol to regular customers. The heavier grades have not rallied as much as light, sweet grades. One trader said heavy grades were being offered at parity with dated Brent or at small premiums. Petroperu has issued a tender to buy 760,000 barrels of either a Latin American, US or West African crude for March loading. Taiwanese refiner CPC has issued a tender to buy an unspecified amount of light sweet crude. The company has taken an increasing amount of US shale rather than West African crude over the last year. Indian refiner HPCL is running a buy tender that could draw in West African crude.

South Sudan: South Sudan sees $2b investment as start, expects more in 2019

ecent pledges of $2 billion in investment for South Sudan’s oil may be just the start, with the war-torn nation expecting further agreements in early 2019, Ezekiel Lul Gatkuoth, the country’s petroleum minister said. Gatkuoth’s prediction comes as the African nation’s warring sides prepare to form a powersharing government in the latest bid to end five years of conflict. The country, home to sub-Saharan Africa’s third-largest crude reserves, is banking on the restoration of production facilities and increased output to fund an administration that’s expanding to include top rebel officials. Recently, a South African government fund

pledged to invest $1 billion in oil exploration and the building of a refinery. Petroliam Nasional Bhd of Malaysia has promised to put a further $300 million into its operations, while Oranto Petroleum International Ltd. of Nigeria has wagered $500 million on developing an oil block, and local firm Trinity Energy has pledged $350 million. Gatkuoth said Russian, Spanish and Emirati companies may soon join them. “Soon, we would be having exploration, production and sharing agreements signed to have new players in the oil industry. The narrative has changed from South Sudan being in war” to “South Sudan is coming back again,” said Gatkuoth. Oil, South Sudan’s

almost-sole source of government income, has been an integral part of the conflict that may have claimed almost 400,000 lives and caused a regional refugee crisis since it erupted in December 2013. Production fell by at least a third during the war as insurgents targeted facilities, while a drop in global prices fed an economic crisis. Under a peace deal between President Salva Kiir and rebel leader Riek Machar that was finalized in September, oil again has a leading role. The pact was part-brokered by Sudan, which is suffering from its own economic turmoil and gets vital revenue by exporting the landlocked south’s crude via its pipelines to the Red Sea. “The peace deal makes

the oil investments possible,” said Alex De Waal, executive director of the World Peace Foundation at Tufts University in Massachusetts. “The oil investments should then generate enough money to make the political-market share out of the benefits workable.” Gatkuoth said South Sudan is targeting oil output of 200,000 barrels per day, from a current 155,000 barrels, after the restarting of the country’s northern Unity field in late December. With further investment, production will increase throughout the year, according to the minister, who said security forces will protect the oil installations and workers while investors will be given unspecified tax-grace periods.

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Market: Major LNG buyers’ un-contracted demand to quadruple by 2030

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Brief

nergy consultants Wood Mackenzie’s latest research reveals that un-contracted demand, by the world’s seven largest LNG buyers, could quadruple from 20 million metric tons today to 80 by 2030. Buyers of LNG based in north-east Asia including Japan, China, South Korea, India and Taiwan account for more than 50 percent of today’s global LNG market of 308 million metric tons. However, by 2030, global LNG demand will reach 450 million metric tons forecasts Bloomberg NEF. This projected increase of contracted and un-contracted demand from Asian buyers is very good news for both traditional LNG exporters such as Qatar and Australia, the newcomers in the US Gulf of Mexico and Russia’s Yamal as well as upcoming Mozambique. LNG is going to be the chief beneficiary of the climate agenda, to contain the global rise in

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ergy resource but also buyers from other parts of the world, most notably Europe including Italy’s Enel, Britain’s Centrica and France’s EDF. This is especially the case as legacy LNG supply contracts of 20 years will expire soon, prompting the need to secure new supplies. It is likely that these new purchases will be both contract and spot market based, with an eye for low average costs and good security of supply. Wood Mackenzie expects a record number of final investment decisions on LNG projects in 2019, potentially raising production by an additional 220 million metric tons per year. This represents a large and rapid forthcoming expansion in world LNG supply when compared to the early years, when supplies increased from 200 million tonnes in 2000 to 300 million tons in 2018, according to BP’s Energy Outlook for 2018. Amongst the multiple large-scale projects that

Libya: NOC cuts off gas supply to JV with Norway’s Yara

ibyan state oil firm NOC said it had suspended gas supplies to a jointventure it operates with Norwegian fertilizer producer Yara pending settlement of unpaid debts. NOC said the Libyan Norwegian Fertilizer Company (Lifeco) joint venture owed it more than $80 million while its subsidiary Sirte Oil Co was owed $35 million and 210 million Libyan dinars ($152 million), NOC said in a statement. The NOC said that its management had attempted to resolve the issue through various consultations aimed at rooting out corruption and ensuring operational continuity at LifeCo plants. “NOC has held a series of meetings with Yara’s management and LifeCo’s board of directors to discuss arrangements that ensure LifeCo’s partner assumes its financial responsibility towards collective debts owed to NOC,” the statement read. It added that talks to negotiate a solution have not been successful as a result of Yara’s refusal to assume repayment responsibility, expecting NOC to solely finance

LifeCo’s operations, while continuing to market its products internationally, resulting in an unequal relationship; profitable to Yara, but loss-making for NOC. “NOC assures LifeCo employees that job protection remains an absolute priority for the corporation, while it retains its right to hold financial defaulters, from any party accountable,” according to the statement. The NOC said that it is currently exploring

various solutions to this issue to ensure the continuity of the company and the resumption of business as soon as possible, thereby securing the future of staff, and transforming it into a profitable and transparent company serving the national economy. LifeCo was formed in 2009 as a joint venture, with Yara holding 50 percent of the shares and both NOC and the Libyan Investment Authority each taking a 25 percent stake.

Yara has already been fined $48 million for bribery of government officials and seen a number of its staff, including Yara’s top legal advisor, found guilty of corruption and sentenced to imprisonment by a Norwegian court. Investigations into these incidents of illegality, conducted by the Norwegian and Swiss authorities, are being examined in collaboration with the office of the Libyan public prosecutor, according to the statement of the NOC.

Equatorial Guinea: Ophir Energy denied Fortuna block license extension

E temperature to below 2 degrees Centigrade, economic development in emerging economies and parallel action against visible and destructive air pollution, most notably in China. As Nicholas Brown, Wood Mackenzie research director, has stated, “as China pushes on toward a lower-emission economy, its demand for gas and LNG has grown significantly and we expect the trend to continue in the longer term.” It is not only the world’s leading purchasers of LNG in Asia that are looking for new supplies of this cleaner en-

are likely to be given final investment decision approval are Russia’s $27 billion Novatek’s Arctic 2 LNG project, at least one of Anadarko’s Mozambique schemes and possibly three or more American-based expansion projects. There are also proposed expansion schemes in the Pacific region including Australia’s Gorgan and Woodside and in Papua New Guinea, which are expected to get the green light soon. It is clear, according to Brown, that “Asia’s major buyers will be at the forefront in ensuring this next generation of LNG supply is brought to market.”

quatorial Guinea’s Ministry of Mines and Hydrocarbons has confirmed that no further extension has been granted to Ophir’s Block R production sharing contract. The Ministry issued a notice informing the London-based company of its decision in December 2018, after Ophir’s exploration license expired. As a result, Ophir is no longer operator of the block, which has now returned to the State. “The Ministry recognizes and strongly appreciates the commitment of Ophir in its exploration activities in Equatorial Guinea and welcomes further investment in appropriate opportunities in the hydrocarbon sector,” said Gabriel Mbaga Obiang Lima.

The Ministry commends the Ophir’s exploration efforts in the Block R license, which contains six commercial discoveries.

Ophir’s work program began in 2008 and three exploration wells resulted in the Fortuna and Lykos discoveries. The company planned to install a

floating liquefied natural gas plant, named Fortuna FLNG, on the block, pending investment in the project. Floating LNG has emerged as a template for developing offshore gas in a well-supplied global gas market. Covering an area of approximately 2,450 km², Block R is located in Distal Niger Delta, approximately 140 km off the coast of Bioko Island, in water depths ranging from 600 m to 1,950 m. It is estimated to hold 3.4 trillion cubic feet (TCF) of recoverable gas reserves, of which the Fortuna field accounts for approximately 1.3TCF, the Silenus Complex holds approximately 1.2TCF, the Tonal discovery holds about 0.5TCF and the other smaller discoveries together hold 0.4TCF.

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Uganda: Increased solar power to boost Uganda’s electricity sector

ollowing the launch of the 24MW solar plant in Kabulasoke in Gomba District, it has been declared that there are more solar power plants to be built. Xsabo Group, the company which forms part of the consortium that completed the development of the Kabulasoke solar power park, is planning to invest $200 million in the generation of solar power to supply to the national grid, its CEO David Alobo, has declared. Alobo said the company plans to implement similar projects in Soroti (50MW), Mubende (50MW), Kasese (20MW), and Lira (10MW). The development work in Mubende is expected to commence in April this year followed up with Soroti and others. “This is just the beginning; we have the money

ready,” he said, adding, “we are doing this out of patriotism and love for our dear country and our dear people.” The Kabulasoke power project sits on a 120-acre piece of land with a 20-year generation concession issued by the industry regulator, Electricity Regulatory Authority. The company would sell its electricity to Uganda Electricity Distribution Company Limited. Alobo assured that households that surround the projects will benefit through land compensation and free electricity connectivity to the nearby schools and health centres. “The general idea behind these projects is to generally support investments, power industries which are instrumental in supporting growth of the economy,” he said. Simon D’Ujanga, the state minister for energy and mineral development said the country will have 120MW of solar energy connected to the national grid as at the end of this year. “We want to use solar to enhance electricity access in rural areas. These investors are complementing government efforts of supporting industrialisation and socio-economic development,” D’Ujanga said.

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Côte d’Ivoire: AFC announce financial close of hydropower bridge loan facility

nfrastructure development finance institution, Africa Finance Corporation (AFC) has announced the financial close of a bridge loan facility contracted by Ivoire Hydro Energy (IHE) for the construction of the 44MW Singrobo-Ahouaty hydroelectric power project (SAHP) in Côte d’Ivoire. AFC’s commitment towards IHE amounts to a total of $197 million, comprising a majority equity investment of $27.6 million, and a bridge loan facility of $170 million. The first disbursement of the bridge loan facility occurred in December 2018. IHE’s other shareholders include Themis, a project development company, and IHE Holding, a company incorporated by Ekolan Alain Etty, a local entrepreneur. The SAHP will be built by Eiffage, a French leading EPC contractor, selected following an internation-

al competitive bidding. AFC adopted an innovative financing strategy for the project. This involved utilising a bridge loan to shorten the project cycle and commence project construction. SAHP’s financing structure was designed to shorten the development phase for projects of this type from circa 10 years to fewer than five years. It is expected that this approach will accelerate the process of developing projects in

Africa and enable more power projects to come on stream. AFC arranged the bridge loan facility to kick-start construction while awaiting long-term lenders to secure their final credit approvals. The African Development Bank is arranging the long-term debt financing, most of which has already secured approvals. Côte d’Ivoire currently generates 2,200MW of electricity making it one of

the leading generators of power in West Africa with approximately 70 percent through thermal generation with the remainder being renewables, mainly hydroelectric. The SAHP will increase the country’s overall power capacity as well as reduce generation costs due to the low operating cost of hydroelectric power. The hydropower project will also further Côte d’Ivoire’s goal of becoming a forerunner in the field of renewable energy.

Africa: First project financing facility for mini-grids launched

frica’s first project financing facility for mini-grids, was launched this month with funding commitments from The Rockefeller Foundation and Ceniarth. The facility was launched by CrossBoundary Energy Access (CBEA) who will initially invest $16 million into mini-grids serving 170,000 people, providing first-time power to homes and businesses. The focus is on markets with supportive mini-grid regulatory frameworks, such as Tanzania, Nigeria, and Zambia. Gabriel Davies, Head of Energy Access at CrossBoundary, said: “Mini-grids are critical to achieving universal electrification in Africa at the least cost. We believe longterm project finance structures will allow mini-grids to scale. We are building

investment portfolios that will attract the long-term, infrastructure-type capital the sector needs from institutional investors.” CrossBoundary conservatively estimates that at least 100 million people can be most cost effectively served by mini-grids today, and that using private sector development and investment could accelerate the buildout of those grids. However, so far, private sector mini-grids have not attracted the needed funding. Like all energy infrastructure projects, mini-grids require a significant upfront investment while delivering predictable returns over a 10–15 year period. To scale, the capital provided must be long-term, affordable and accept lower yield returns. Operating in an emerging asset class with smaller

balance sheets, mini-grid companies have so far struggled to raise that kind of financing. CrossBoundary Energy Access bridges the gap to commercial scale, allowing private capital to invest today by blending it with patient equity from

impact-first investors such as Ceniarth and development-focused debt from institutions such as The Rockefeller Foundation. The facility also allows private investors to invest in the projects themselves, similar to how most of the world’s 1,000 gigawatts of

wind and solar projects have been financed. Private sector capital and private sector minigrids have an essential role to play in achieving Sustainable Development Goal 7 (SDG7): Ensure access to affordable, reliable, sustainable and modern energy for all. CrossBoundary Energy Access is seeking additional equity investment to expand this blended finance vehicle that provides both social and financial returns. Shell Foundation and UK aid, through the Transforming Energy Access programme, provided support to design and launch CrossBoundary Energy Access. Sam Parker, Director, Shell Foundation, commented: “Shell Foundation has been a strong supporter of mini-grids

for almost a decade. We believe the sector is now ready for the larger scale infrastructure finance that will enable it to scale. We are supporting CrossBoundary Energy Access because we believe that its aggregation approach will catalyze the hundreds of millions of dollars of private capital that is needed, alongside public finance, to grow the sector.” Diane Isenberg, Director, Ceniarth, commented: “We believe CrossBoundary Energy Access has developed a thoughtful, blended approach to the challenge of unlocking capital for the mini-grid sector. We hope that as more data emerges to support the economics of the model, additional capital will flow into the sector at terms that allow us to gain increased leverage on our subordinate investment.”

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ENERGY intelligence

Oil sector reform: Looks like Indonesia would soon leave Nigeria behind FRANK UZUEGBUNAM

igeria’s oil sector reform has been on the table for over 18 years. President Obasanjo inaugurated the Oil and Gas Implementation Committee (OGIC), led by the late Rilwanu Lukman in year 2000 and this led to Draft National Oil and Gas Policy in 2004. That was the beginning of the endless journey of the Petroleum Industry Bill (PIB) was introduced in 2008. PIB was split into four parts to accelerate passage: The Petroleum Industry Governance Bill (PIGB), the Petroleum Industry Administration Bill (PIAB), the Petroleum Industry Fiscal Bill (PIFB) and the Petroleum Host and Impacted Communities Bill (PHICB). The PIGB was finally passed by the National Assembly in April 2018 and forwarded to the President for assent, but that assent has not been given. Between the period Nigeria started its oil sector reforms and now, Uganda passed its own reforms in 2013, Mozambique passed its Petroleum Law in 2014, Tanzania passed its Petroleum Act in 2015, while Ghana passed its Petroleum Exploration and Production Act in

2016. Perhaps, it is the turn of Indonesia to leave Nigeria behind. The country’s President, Joko Widodo recently responded to a proposal initiated by parliament, calling for a plan to revive the ailing sector and boost the country’s energy independence. Widodo met with his senior cabinet members to craft a response to parliamentary proposals for a new law submitted in December 2018. “The revisions should provide momentum for regulatory reforms to make the oil and gas sector more efficient, transparent, straightforward, sustainable and provide added value to the national economy”, Widodo said according to a statement from the cabinet secretary issued. Formerly an oil exporter and member of the Organization of the Petroleum Exporting Countries (OPEC), Indonesia’s crude output has plunged while its fuel demand has surged, making the country reliant on imports of gasoline and diesel. The slump in oil and gas output has followed years of regulatory uncertainty. Recent pressure from the government on state-owned energy producer PT Pertamina to take over assets from oil majors like Chevron and Total has stoked concerns among foreign ener-

gy investors about the security of their projects. Indonesia has struggled to revamp its last set of oil and gas laws passed in 2001 and a parliamentary committee finally proposed a new law to the full body in December 2018. Issues surrounding the oil and gas sector have long been a source of tension with foreign investors, and resolving these matters has proven challenging for Widodo, who is running for re-election in April 2019. “The aim of this revision must not only be to push to increase oil and gas production, but also to support the strengthening of national capacities, strengthening domes-

tic industries and investment in our human resources in the oil and gas industry,” according government statement. Among the changes the parliament proposed and which Widodo and his cabinet will discuss with them is the creation of a new oil and gas business entity that will also serve as a regulator, called BUKMigas, according to a draft of the law as reported by Reuters. That agency will take over from the current upstream regulator SKKMigas and the downstream regulator BPHMigas. In addition to its regulatory role, BUKMigas will also be able to undertake work in oil and gas exploration and production.

Snapshot The slump in oil and gas output has followed years of regulatory uncertainty. Recent pressure from the government on state-owned energy producer PT Pertamina to take over assets from oil majors like Chevron and Total has stoked concerns among foreign energy investors about the security of their projects

However, BPHMigas will still maintain oversight of pipeline fuel and gas transportation. For the first time, Indonesia would have a state petroleum fund, bankrolled with revenue the government makes from oil and gas production as well as levies and bonuses, according to the draft. More talks about the proposed law will be held between Widodo’s government and the parliament. Hufron Asrofi, Energy and Mineral Resources Ministry Legal Bureau Chief told reporters that the government is compiling a list of problems with the current draft for discussion. According to a note on Indonesia’s oil and gas policy published recently by Fitch Solutions Macro Research, much work is still needed to attract investment to the oil and gas sector. “When viewed in the context of intensifying competition for foreign direct investments across South and Southeast Asia, Indonesia remains at risk of falling behind, despite its impressive reserves profile and large market, if the tightening state grip over the sector is not loosened.” But then, the country is now moving in the direction of overhauling its oil and gas law to resolve the uncertainties.

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ENERGY intelligence Brief

Total Ghana unveils third solar powered station

otal Petroleum Ghana Ltd., a locally listed oil marketing company, has opened its third solar powered station in Kumasi, as part of its commitment to develop solar energy through cutting-edge technology. The Total Mile 4 service station, which is also the very first of its kind in the Ashanti Region, has 50 solar panel installation with about 16.35 kWp of power production. This service station is an ultramodern one with a convenient

shop, forecourt and a lube bay for efficient vehicle servicing. Speaking on the project, Eric Fanchini, Managing Director, said the installation of the solar system is expected to contribute to the reduction of the site’s carbon footprint. He said since the company inaugurated the Tema Main Harbour solar service station in July

2018 and the second solar station at Takoradi Airport Junction service station in November 2018, it has been able to save up on electricity cost, harnessing the potential of solar energy. Fanchini said the three solar powered stations were constructed and maintained by local engineers and solar experts. The company believes that the way to consolidate its social operating license is to share expertise with the local skilled force and to listen to stakeholders. ‘As a responsible industrial player, Total Petroleum Ghana takes action to develop new energies that are efficient and environmentally friendly,’ adding that, “this is equally central to the modernization of our service stations to bring convenience and quality products and services to customers. “In addition to the solar station, the company introduced solar kiosks to selected service stations in 2018 to provide easy access to phone charging and wifi connection.” He said the company started the wave of renewable energy in 2015 with the introduction of 100% solar lamps, which are accessible at all Total service station shops nationwide.

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Wednesday 30 January 2019

finance people appointments

APPO, African Producers call for cooperation, reform at Cape VII Congress & Exhibition

he African Petroleum Producers Organization (APPO) and its member countries call for unity, cooperation and reform amongst oil producers ahead of the Cape VII Congress and Exhibition, which will take place April 1-5, 2019 in Malabo, Equatorial Guinea. APPO is inviting all interested companies / or parties to participate in this important gathering of oil and gas government and private sector leaders in Africa in 2019, with ministerial speakers from all African oil producing nations. “We invite the global oil and gas industry to participate in this historic conference. Cape VII is like the Olympics of African oil and gas, it’s a time when the world comes together,” said Mahaman Laouan Gaya, Secretary General of APPO. “Africa needs unity and synergy in all sectors of its economies to boost growth. When we unite, it is easier to collaborate.” Taking place against a backdrop of greater African involvement in energy institutions, rising investment in upstream projects, a favourable oil price environment and the

recent restructuring of APPO, the conference highlights regional cooperation and promotes alliances in African energy. The theme of APPO Cape VII is ‘Pathways to Shared Prosperity in the African Petroleum Industry’ and is being held under the auspices of Teodoro Obiang Nguema Mbasogo, President of Equatorial Guinea. The event also shines a spotlight on key regional energy projects and initiatives such as

Equatorial Guinea’s Gas Megahub, which will link domestic and cross-border gas projects; Equatorial Guinea’s LNG2Africa, which is promoting intra-African gas trade; Sudan and South Sudan’s cooperation on restarting oil production; licensing rounds in Nigeria, Gabon and the Republic of Congo; and key economic and investment reforms in Angola; APPO is currently undergoing important reforms focused on cre-

ating a united African front on the global energy stage. The organization seeks to increase regional cooperation on upstream projects, infrastructure, refineries and other major projects. It also aims to attract more members as African countries make significant oil and gas discoveries, while growing their reserves. “Regulatory and policy reforms are needed on a case-by-case basis. Countries like Ghana, Senegal and Mozambique have some of the most attractive and competitive market conditions in the world. Additionally, Africa has proven itself as a host of mega discoveries with a wealth of untapped and undiscovered potential,” said Gaya. APPO Cape VII takes place during Equatorial Guinea’s Year of Energy, a series of events promoting Africa’s energy potential and positioning Malabo as a continental energy center. “Equatorial Guinea has a distinguished track record as a host country for events of continental importance, and this APPO meeting will be momentous,” said H.E. Gabriel Mbaga Obiang Lima, Minister of Mines and Hydrocarbons of Equatorial Guinea, host of the conference.

NIMASA recognises NLNG as a caring Company

igeria LNG L i m i t e d (NLNG) has received a special recognition award as a caring company, for demonstrating virtues that positively impact the lives of the citizens of Nigeria NLNG was recognised by the Nigerian Maritime Administration and Safety Agency (NIMASA) at the agency’s Corporate Dinner and Merit Awards in Lagos for its outstanding contributions to the realisation of the agency’s mandate on safety on the waterways, especially the Bonny-Port Harcourt sea route which borders

NLNG’s area of operation in Rivers State. Speaking at the Award Dinner, Tony Attah, NLNG Managing Director, acknowledged NIMASA’s commitment at ensuring order and safety on the water ways, and solicited more cooperation from the agency to sustain the success of NLNG’s operations as Nigeria’s major player in the global LNG market, with significant shipping activities, managed by its subsidiary, NLNG Ship Manning Limited (NSML). Attah recalled the significant contributions of NLNG towards the development of the

shipping sector in the country, observed the growing risks that sea piracy attacks pose to the company’s business on the Bonny Channel and expressed strong faith that NIMASA will not relent in nipping the trend in the bud. Recently, the company was involved in the rescue of 12 victims of a boat mishap on the Bonny Sea. NLNG, through its subsidiary, NLNG Ship Management Limited (NSML) has been very active in supporting NIMASA towards the development of the maritime sector. NSML is currently facilitating a Seafarer

Continuous Development Programme (SCDP) which presently has 36 NIMASA sponsored cadets on NSML managed vessels. NSML’s plan is to continue to partner with NIMASA by continuously providing best in-class sea services to Nigerian cadets in line with the NLNG’s vision of helping to build a better Nigeria. The Seafarer Continuous Development programme will be of benefit to over a thousand cadets trained by NIMASA, who are in need of berth space on board vessels, to obtain the mandatory sea time requirement for their progress.

Wednesday 30 January 2019

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leader Juan Guaido as interim president, prompting President Nicholas Maduro to cut ties with Washington. But the ongoing USChina trade dispute and broader gloom over world economic growth put a check on prices. Brent crude oil futures were at $61.70 a barrel, up 61 cents, or 1 percent. US West Texas Intermediate (WTI) crude futures were

boon for the Asian countries, where the governments are trying to support slowing economic growth. In China, the government is trying to implement stimulus measures to shield the public from the effects of its ongoing trade war with the US. Meanwhile, Venezuela will likely be eager to hold on to China and India as customers, especially after years of economic turmoil has battered the nation’s production and

ENERGY intelligence trading at $53.77 per barrel, up 64 cents. RBC Europe predicted that US sanctions could nearly double projected output shortfalls from Venezuela. “Venezuelan production will decline by an additional 300,000-500,000 barrels per day (bpd) this year, but such punitive measures could expand that outage by several hundred thousand barrels,” it said. Still, some analysts said the possibility of immediate sanctions were unlikely. “We view a blockade on Venezuelan imports as low probability and a last resort measure that is likely weeks if not months away should it materialize,” Jim Ritterbusch, president of Ritterbusch and Associates, said in a note. Global oil markets are still well supplied, however, thanks in part to a spike in US output. Record US production would likely offset

any short-term disruptions to Venezuelan supply due to possible US sanctions, Britain’s Barclays said in a note. The bank cut its 2019 average Brent forecast to $70 a barrel, from $72 previously. Analysts have predicted a more balanced market due to a production cut pact by the Organization of Petroleum Exporting Countries (OPEC) and its allies including Russia, as well as potential export disruptions in Venezuela, Iran and Libya. Demand may start to stutter because of a global economic slowdown, which is likely to dent fuel consumption. A trade dispute between the United States and China and tightening financial conditions around the world have hurt manufacturing activity in most economies, including in China, where growth last year was the weakest in nearly 30 years.

US ban may offer China, India feast of cheap Venezuelan oil

f the US decides to deploy a slate of sanctions that it is said to have drafted against the Latin American nation, American refiners, the No. 1 consumer of Venezuelan crude exports, would be forced to cease purchases. That may mean more supply becomes available for the OPEC producer’s other big customers: China and India. The opportunity to soak up the extra supplies from Venezuela at potentially cheap prices would be a

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Oil climbs on Venezuelan crisis despite surging US il prices edged higher as political turmoil in Venezuela threatened to tighten crude supply, but concerns over surging US fuel stocks and global economic woes weighed on sentiment. The United States signalled it may impose sanctions on Venezuelan exports after recognising opposition

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left it with few other buyers in the growing Asian oil market. Other major crude buyers such as South Korea and Japan have largely stopped purchases from the Latin American country, and even China and India have reduced imports. “The quality of Venezuelan oil has been deteriorating after years of under-investment and aging infrastructure,” said Virendra Chauhan, an analyst at industry consultant Energy

Aspects Ltd. “That’s making the country’s crude more difficult for refineries to run, reducing its customer pool. This means it will be tough for Venezuela to sell more oil to new markets and customers outside of traditionally active buyers in China and India.” China imported about 340,000 bpd of crude from Venezuela in the first 11 months of 2018, accounting for 3.7 percent of total shipments from overseas, government data show.

OPEC Flakes OPEC to Trump: Production cuts also helping US oil companies

he head of a US shale oil company sang the praises of OPEC for its pricebolstering production cuts of the last two years, a message the organization’s secretary general said he hopes US President Donald Trump is hearing. “OPEC members play a very important role in stabilizing the market for oil, so those efforts are to be recognized,” John Hess, the CEO of Hess Corp., said at the World Economic Forum in Davos, Switzerland. “You’re going to need more stable prices, and prices certainly higher than the $52 or $53 WTI price that we have now to keep global oil and gas supply growing with demand in the world and also meeting production declines.” Trump, who counts OPEC kingpin Saudi Arabia among his key allies, has been OPEC’s critic-inchief, tweeting eight times at the producer group in 2018 to keep oil flowing and prices low for the benefit of the world’s largest oil consumer; the US. The pressure from the president, along with threats by the US Congress to pass so-called NOPEC legislation that would expose the organization to antitrust lawsuits, has OPEC seeking to shed

its image as a price gouging cartel. Secretary General Mohammed Barkindo was the latest official to spread the message that the bloc’s supply cuts have been a lifeline to oil companies in the US. “You have heard from them. What we have done is commendable. It helped to rescue the US oil industry,” Barkindo said at the Davos event, sharing a stage with Hess and Occidental Petroleum CEO Vicki Hollub. “All I can tell you is that the actions we have taken are holistic decisions that are not just good for the OPEC alliance but also for the United States.” OPEC, Russia and nine other non-OPEC allies in December agreed to cut 1.2 million b/d for the first six months of 2019, just after completing a two-year 1.8 million b/d production cut agreement from 2017-2018.

OPEC focus on averting new oil glut

PEC and its allies do not rule out taking further action at their next meeting in April should oil inventories build up in the first quarter, Mohammad Barkindo, OPEC’s secretary general said. Worried by a drop in oil prices and rising supplies, OPEC and nonOPEC countries such as Russia agreed in December to return to production cuts in 2019. The producers will meet on April 17-18 to review the pact. Barkindo did not rule out more action if industrialized nation stocks continued to rise above the five-year average. “We remain focused on the supply-demand balance,” Barkindo said. “Our challenge is to maintain supply-demand balance.” “We have seen inventories rising beyond the five-year average. A couple of months ago we

have seen a deficit. We intend to ensure stocks remain within the fiveyear average.” A recovery in oil prices this year will boost hopes among producers that the deal to cut supplies, which began on January 1, is working. Oil has risen to above $60 a barrel, after a dip below $50

at the end of 2018. Barkindo said producers were making significant oil production cuts to avoid a build-up during the first quarter, and the oil market had reacted well.

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Wednesday 30 January 2019

talking points

ENERGY intelligence

The incredible ways Shell uses artificial intelligence to help transform the oil and gas giant BERNARD MARR

oyal Dutch Shell is heavily investing in research and development of artificial intelligence (AI), which it hopes will provide solutions to some of its most pressing challenges. From meeting the demands of a transitioning energy market, urgently in need of cleaner and more efficient power, to improving safety on the forecourts of its service stations, AI is at the top of the agenda. I have been working with Shell over the past months to help create a data strategy, which gave me a thorough insight into Shell’s AI priorities and initiatives. Current initiatives include deploying reinforcement learning in its exploration and drilling program, to reduce the cost of extracting the gas that still drives a significant proportion of its revenues. Elsewhere across its global business, Shell is rolling out AI at its public electric car charging stations, to manage the shifting demand for power throughout a day. It has also installed computer vision-enabled cameras at service stations, which are capable of detecting customers lighting cigarettes – a severe hazard. During the data strategy development, I worked with Daniel Jeavons, Shell’s general manager for data science. Jeavons talked to me about Shell’s AI-first strategy and said “What it means in practice is that we as a data science team are in a great position because we can make our current business more effective, more efficient, more reliable, safer – by applying AI into those settings. “But we can also play a role in creating some of the new business models that we want to create, and that’s really exciting because we’re playing our part in taking Shell into the next generation of energy sources, new fuels, and new sources of revenue.” Precision Drilling Shell is involved in the entire oil and gas supply chain – from mining raw hydrocarbons from the earth to refining them into fuel and various other products, to retailing them to businesses and individuals. AI is being rolled out or trialed at each step of this process. Recent developments include the adoption of reinforcement learning, a form of “semisupervised” machine learning, to control its drilling equipment. While machine learning can work with either labeled data (supervised learning) or unlabelled data (unsupervised learning), reinforcement learning takes a middleground approach by incorporating a reward system, dependent on the outcome of the AI’s “choices.” As Jeavons says, “The key thing is you’re giving the [AI] agent the autonomy to make the decision. But you’re providing input into the model, so you’re providing reward or penalty functions on the basis of what’s happening in the model, and how the model responds to the set of conditions that you give it.”

Algorithms designed to guide the drills as they move through a subsurface are trained on historical data from Shell’s drilling records, as well as information gathered from simulated exploration. It covers mechanical information from the drill bit, such as temperature and pressures, as well as data on the subsurface from seismic surveys. The result is that a Shell geosteerer, the human operator of the drilling machine, is able to understand the environment more accurately they are operating in, leading to faster results and less wear, tear and damage to machinery. In many ways the challenge was similar to those faced by developers working on self-driving cars – only instead of navigating hazards a vehicle might encounter on the road, the drilling machinery must autonomously adapt to changing conditions under the ground. Jeavons says “We talk a lot about augmented intelligence, and the reason is that this isn’t about removing people from the operation … what we’re trying to do is help the people who make the decisions to make those decisions with additional support from the intelligence that we’ve created. “What we expect is that this will probably never fully replace geosteering as a discipline, but it will allow a single geosteerer to support many more wells.” Charging efficiency Encouraging motorists to switch to an electric vehicle is seen as key to reducing the Co2 emissions caused by humanity, and limiting their effect on climate change. But it involves something of a chickenand-egg problem. Motorists are put off making the switch due to a lack of public charging terminals, and forecourt operators may be slow to adopt them due to a

lack of demand. Shell’s answer to this problem involves deploying AI to monitor and predict the demand for terminals throughout the day, enabling power to be supplied more efficiently. “If you think about it,” says Jeavons, “as a grid operator you’re operating many, many electric charging posts … if all the cars plug in at the same time and automatically start charging, you create a big load on the grid t, by the way, can’t be filled by solar, because it’s 7 am or 8 am in the morning.” “So, what we can do by understanding people’s charge profiles is we can spread the load during the day, which basically means we can save the consumer money. “But also, more renewables are used – because if you can charge more people at lunchtime, there’s going to be more solar on the grid at that point. “It’s an example of where we see the role of artificial intelligence playing a key part – thinking about not just how we can make things more efficient, but also how we can change energy consumption patterns to take more advantage of renewable sources.” The program, known as RechargePlus, is currently being rolled out in California. Monitoring forecourts Another initiative being trialed in Singapore and Thailand involves the use of computer vision at service station forecourts. Computer vision – cameras which can “think” and understand what they are filming – are trained to watch out for the potential hazard of customers lighting cigarettes in the vicinity of pumps and refueling vehicles. Camera data is processed by what is essentially the same technology powering Google’s reverse image search, which al-

lows the content of the picture to be labeled and categorized. When an image is detected that matches what the algorithms “know” (through training) is a person lighting a cigarette, alerts can be issued allowing the forecourt staff to close down nearby pumps and reduce the risk of fires or explosions. This relies on “edge processing,” with camera data being analyzed locally to avoid the delay that would be inevitably caused by sending it to the cloud and back before action could be taken. While it currently focuses on spotting smokers, in the future the technology could also be trained to detect other hazards such as reckless driving, criminal damage or theft. Shell has certainly progressed a long way on the path towards becoming a truly AI-first organization, and the key to this has been identifying use cases where AI can drive real and immediate value. However, it is likely to face even more significant challenges in the future, if it is to meet its responsibilities around energy transition. Jeavons says “Artificial intelligence has a huge role to play in energy transformation – we are trying to paint a picture of a way forward for a society that would meet the Paris targets … I think what’s important about that, is that oil and gas are going to be a part of that future because it’s very hard to move away from it altogether. AI is essential if we’re going to make our existing carbon sources of energy more efficient – optimization is going to be massive. “But there’s also a whole bunch of other energy sources in there as well – and many of the emerging technologies are going to need AI in order to be effective – smart charging is just one.” Source: https://royaldutchshellgroup.com

Wednesday 30 January 2019

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BUSINESS DAY

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Live @ the Stock exchange Prices for Securities Traded as of Tuesday 29 January 2019 Company

Market cap(nm)

Price (N)

Change

Trades

Volume

Company

Market cap(nm)

Price (N)

Change

Trades

Volume

PRICES FOR MAIN BOARD SECURITIES (Equities) BANKING ACCESS BANK PLC. 175,014.23 6.05 -4.72 223 11,394,958 249,655.78 7.30 -0.68 300 48,843,296 UNITED BANK FOR AFRICA PLC 720,549.53 22.95 -2.13 377 14,894,326 ZENITH BANK PLC 900 75,132,580 OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC 271,009.46 7.55 -0.66 243 13,727,705 243 13,727,705 1,143 88,860,285 BUILDING MATERIALS DANGOTE CEMENT PLC 3,305,858.44 194.00 - 41 100,542 108,417.85 12.50 - 64 842,816 LAFARGE AFRICA PLC. 105 943,358 105 943,358 EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC 305,991.17 520.00 - 19 30,229 19 30,229 19 30,229 1,267 89,833,872 REAL ESTATE INVESTMENT TRUSTS (REITS) SKYE SHELTER FUND PLC 1,900.00 95.00 - 0 0 11,300.89 45.20 - 0 0 UNION HOMES REAL ESTATE INVESTMENT TRUST (REIT) UPDC REAL ESTATE INVESTMENT TRUST 15,876.20 5.95 - 0 0 0 0 0 0 OTHER FINANCIAL INSTITUTIONS NIGERIA ENERYGY SECTOR FUND 411.91 552.20 - 0 0 VALUEALLIANCE VALUE FUND 3,312.39 103.20 - 0 0 0 0 0 0 0 0 CROP PRODUCTION FTN COCOA PROCESSORS PLC 440.00 0.20 - 0 0 78,220.62 82.00 - 12 92,402 OKOMU OIL PALM PLC. PRESCO PLC 60,000.00 60.00 - 17 125,360 29 217,762 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 511.20 4.26 - 0 0 0 0 LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC. 1,590.00 0.53 - 6 26,097 6 26,097 35 243,859 DIVERSIFIED INDUSTRIES A.G. LEVENTIS NIGERIA PLC. 767.71 0.29 - 2 3,448 186.79 0.48 - 2 3,128 JOHN HOLT PLC. S C O A NIG. PLC. 1,903.99 2.93 - 1 177 51,622.95 1.27 1.60 86 5,032,919 TRANSNATIONAL CORPORATION OF NIGERIA PLC 24,491.02 8.50 -0.58 35 277,893 U A C N PLC. 126 5,317,565 126 5,317,565 BUILDING CONSTRUCTION ARBICO PLC. 711.32 4.79 - 0 0 0 0 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 36,960.00 28.00 - 9 98,162 ROADS NIG PLC. 165.00 6.60 - 0 0 9 98,162 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT COMPANY PLC 4,469.24 1.72 9.55 19 3,079,390 19 3,079,390 28 3,177,552 AUTOMOBILES/AUTO PARTS DN TYRE & RUBBER PLC 954.53 0.20 - 0 0 0 0 BEVERAGES--BREWERS/DISTILLERS CHAMPION BREW. PLC. 13,310.14 1.70 - 4 22,144 GOLDEN GUINEA BREW. PLC. 242.22 0.89 - 0 0 GUINNESS NIG PLC 155,517.18 71.00 - 25 53,243 INTERNATIONAL BREWERIES PLC. 260,024.82 30.25 - 12 28,790 NIGERIAN BREW. PLC. 623,758.36 78.00 -2.38 108 2,348,461 149 2,452,638 FOOD PRODUCTS DANGOTE FLOUR MILLS PLC 30,000.00 6.00 -3.23 78 2,541,732 DANGOTE SUGAR REFINERY PLC 169,200.00 14.10 -1.40 59 759,101 FLOUR MILLS NIG. PLC. 79,547.36 19.40 -0.51 46 343,225 HONEYWELL FLOUR MILL PLC 9,754.14 1.23 -5.38 29 767,673 MULTI-TREX INTEGRATED FOODS PLC 1,340.10 0.36 - 0 0 N NIG. FLOUR MILLS PLC. 703.89 3.95 - 3 9,698 NASCON ALLIED INDUSTRIES PLC 47,424.95 17.90 - 30 133,972 UNION DICON SALT PLC. 3,676.41 13.45 - 0 0 245 4,555,401 FOOD PRODUCTS--DIVERSIFIED CADBURY NIGERIA PLC. 18,782.02 10.00 2.04 18 189,594 NESTLE NIGERIA PLC. 1,149,351.57 1,450.00 - 41 37,303 59 226,897 HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. 1,680.31 22.10 - 1 500 VITAFOAM NIG PLC. 4,680.24 4.49 - 35 867,420 36 867,920 PERSONAL/HOUSEHOLD PRODUCTS P Z CUSSONS NIGERIA PLC. 48,241.30 12.15 7.52 17 156,642 UNILEVER NIGERIA PLC. 209,979.95 36.55 - 24 80,204 41 236,846 530 8,339,702 BANKING DIAMOND BANK PLC 53,037.29 2.29 0.44 149 24,025,326 ECOBANK TRANSNATIONAL INCORPORATED 275,243.27 15.00 - 43 467,904 FIDELITY BANK PLC 65,193.29 2.25 -4.66 176 17,752,925 GUARANTY TRUST BANK PLC. 994,773.86 33.80 -1.31 302 7,087,831 JAIZ BANK PLC 15,321.41 0.52 -3.70 14 1,180,067 SKYE BANK PLC 10,687.83 0.77 - 0 0 STERLING BANK PLC. 66,217.96 2.30 2.68 165 30,150,183 UNION BANK NIG.PLC. 180,548.67 6.20 0.81 16 164,026 UNITY BANK PLC 10,871.08 0.93 -1.06 13 462,059 WEMA BANK PLC. 26,230.64 0.68 -2.86 58 2,858,689 936 84,149,010 INSURANCE CARRIERS, BROKERS AND SERVICES AFRICAN ALLIANCE INSURANCE PLC 4,117.00 0.20 - 0 0 AIICO INSURANCE PLC. 4,643.24 0.67 - 25 629,094 AXAMANSARD INSURANCE PLC 20,475.00 1.95 - 2 11,000 CONSOLIDATED HALLMARK INSURANCE PLC 2,170.00 0.31 -3.12 9 100,410,570 CONTINENTAL REINSURANCE PLC 19,811.94 1.91 - 0 0 CORNERSTONE INSURANCE PLC 2,945.90 0.20 -4.76 2 147,000 GOLDLINK INSURANCE PLC 2,411.47 0.53 - 0 0 GUINEA INSURANCE PLC. 1,412.20 0.23 - 0 0 INTERNATIONAL ENERGY INSURANCE PLC 487.95 0.38 - 0 0 LASACO ASSURANCE PLC. 2,343.50 0.32 3.23 8 1,521,000 LAW UNION AND ROCK INS. PLC. 2,191.13 0.51 - 5 200,000 LINKAGE ASSURANCE PLC 4,480.00 0.56 -9.68 8 560,000 MUTUAL BENEFITS ASSURANCE PLC. 1,600.00 0.20 - 1 1,600 NEM INSURANCE PLC 12,620.40 2.39 - 15 266,814 NIGER INSURANCE PLC 2,012.26 0.26 - 2 5,374 PRESTIGE ASSURANCE PLC 2,798.93 0.52 - 5 76,593 REGENCY ASSURANCE PLC 1,467.13 0.22 4.76 2 453,000 SOVEREIGN TRUST INSURANCE PLC 1,668.16 0.20 10.00 10 1,238,201 STACO INSURANCE PLC 4,483.72 0.48 - 0 0 STANDARD ALLIANCE INSURANCE PLC. 2,582.21 0.20 - 1 4,000 SUNU ASSURANCES NIGERIA PLC. 2,800.00 0.20 - 0 0 UNIC DIVERSIFIED HOLDINGS PLC. 516.46 0.20 - 0 0 UNIVERSAL INSURANCE PLC 3,200.00 0.20 - 0 0 VERITAS KAPITAL ASSURANCE PLC 3,050.67 0.22 -8.33 2 161,239 WAPIC INSURANCE PLC 5,620.75 0.42 7.69 15 1,393,741 112 107,079,226

MICRO-FINANCE BANKS FORTIS MICROFINANCE BANK PLC 11,799.67 2.58 - 0 0 NPF MICROFINANCE BANK PLC 3,658.62 1.60 - 4 13,674 4 13,674 MORTGAGE CARRIERS, BROKERS AND SERVICES ABBEY MORTGAGE BANK PLC 4,116.00 0.98 - 1 4,800 7,370.87 0.50 - 0 0 ASO SAVINGS AND LOANS PLC INFINITY TRUST MORTGAGE BANK PLC 5,922.05 1.42 - 0 0 2,265.95 0.20 - 1 2,000,000 RESORT SAVINGS & LOANS PLC UNION HOMES SAVINGS AND LOANS PLC. 2,949.22 3.02 - 0 0 2 2,004,800 OTHER FINANCIAL INSTITUTIONS AFRICA PRUDENTIAL PLC 8,280.00 4.14 0.98 25 576,749 38,232.12 6.50 - 17 735,422 CUSTODIAN INVESTMENT PLC 660.00 0.44 - 0 0 DEAP CAPITAL MANAGEMENT & TRUST PLC FCMB GROUP PLC. 39,605.42 2.00 -6.54 142 11,641,722 1,389.25 0.27 -6.90 10 786,849 ROYAL EXCHANGE PLC. STANBIC IBTC HOLDINGS PLC 481,305.99 47.00 -2.13 14 629,160 19,200.00 3.20 -2.44 101 5,199,481 UNITED CAPITAL PLC 309 19,569,383 1,363 212,816,093 HEALTHCARE PROVIDERS EKOCORP PLC. 1,680.29 3.37 - 0 0 994.88 0.28 -3.45 8 278,944 UNION DIAGNOSTIC & CLINICAL SERVICES PLC 8 278,944 MEDICAL SUPPLIES MORISON INDUSTRIES PLC. 544.04 0.55 - 0 0 0 0 PHARMACEUTICALS EVANS MEDICAL PLC. 366.17 0.50 - 0 0 FIDSON HEALTHCARE PLC 7,050.00 4.70 - 0 0 14,051.55 11.75 - 13 45,500 GLAXO SMITHKLINE CONSUMER NIG. PLC. MAY & BAKER NIGERIA PLC. 4,226.83 2.45 - 5 2,963 1,196.47 0.63 -10.00 50 2,651,757 NEIMETH INTERNATIONAL PHARMACEUTICALS PLC NIGERIA-GERMAN CHEMICALS PLC. 556.71 3.62 - 0 0 PHARMA-DEKO PLC. 325.23 1.50 - 0 0 68 2,700,220 76 2,979,164 COMPUTER BASED SYSTEMS COURTEVILLE BUSINESS SOLUTIONS PLC 710.40 0.20 - 0 0 0 0 COMPUTERS AND PERIPHERALS OMATEK VENTURES PLC 1,470.89 0.50 - 0 0 0 0 IT SERVICES CWG PLC 6,413.06 2.54 - 0 0 648.00 6.00 - 0 0 NCR (NIGERIA) PLC. TRIPPLE GEE AND COMPANY PLC. 381.11 0.77 - 0 0 0 0 PROCESSING SYSTEMS CHAMS PLC 939.21 0.20 - 1 50,000 13,650.00 3.25 - 0 0 E-TRANZACT INTERNATIONAL PLC 1 50,000 1 50,000 BUILDING MATERIALS BERGER PAINTS PLC 2,028.76 7.00 - 7 32,217 22,050.00 31.50 - 1 3,870 CAP PLC CEMENT CO. OF NORTH.NIG. PLC 315,444.02 24.00 - 18 99,783 738.63 0.35 - 0 0 FIRST ALUMINIUM NIGERIA PLC MEYER PLC. 313.43 0.59 - 0 0 PORTLAND PAINTS & PRODUCTS NIGERIA PLC 1,999.41 2.52 - 1 12,000 1,279.20 10.40 - 0 0 PREMIER PAINTS PLC. 27 147,870 ELECTRONIC AND ELECTRICAL PRODUCTS AUSTIN LAZ & COMPANY PLC 2,256.91 2.09 - 0 0 CUTIX PLC. 3,170.38 1.80 - 9 56,500 9 56,500 PACKAGING/CONTAINERS BETA GLASS PLC. 27,823.44 55.65 - 1 7,000 GREIF NIGERIA PLC 388.02 9.10 - 0 0 1 7,000 AGRO-ALLIED & CHEMICALS NOTORE CHEMICAL IND PLC 100,754.14 62.50 - 0 0 0 0 37 211,370 CHEMICALS B.O.C. GASES PLC. 1,577.57 3.79 - 2 8,013 2 8,013 METALS ALUMINIUM EXTRUSION IND. PLC. 1,803.64 8.20 - 2 9,900 2 9,900 MINING SERVICES MULTIVERSE MINING AND EXPLORATION PLC 852.39 0.20 - 0 0 0 0 PAPER/FOREST PRODUCTS THOMAS WYATT NIG. PLC. 50.60 0.23 - 0 0 0 0 4 17,913 ENERGY EQUIPMENT AND SERVICES JAPAUL OIL & MARITIME SERVICES PLC 1,252.54 0.20 - 15 3,741,100 15 3,741,100 INTEGRATED OIL AND GAS SERVICES OANDO PLC 62,778.63 5.05 -0.98 74 1,436,656 74 1,436,656 PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 11 PLC 64,907.15 180.00 - 5 2,248 CONOIL PLC 16,134.39 23.25 - 14 36,917 ETERNA PLC. 5,607.82 4.30 -3.37 38 460,419 FORTE OIL PLC. 38,423.19 29.50 - 53 335,058 7,055.81 23.15 - 1 119 MRS OIL NIGERIA PLC. TOTAL NIGERIA PLC. 75,815.23 223.30 - 23 27,033 134 861,794 223 6,039,550 ADVERTISING AFROMEDIA PLC 2,219.52 0.50 - 0 0 0 0 AIRLINES MEDVIEW AIRLINE PLC 18,038.70 1.85 - 1 5,340 1 5,340 AUTOMOBILE/AUTO PART RETAILERS R T BRISCOE PLC. 411.72 0.35 - 1 502 1 502 COURIER/FREIGHT/DELIVERY RED STAR EXPRESS PLC 3,242.23 5.50 10.00 9 20,732,000 TRANS-NATIONWIDE EXPRESS PLC. 328.19 0.70 - 2 4,721 11 20,736,721 HOSPITALITY TANTALIZERS PLC 642.33 0.20 - 0 0 0 0 HOTELS/LODGING CAPITAL HOTEL PLC 4,801.22 3.10 - 0 0 IKEJA HOTEL PLC 3,159.77 1.52 -9.52 10 790,940 TOURIST COMPANY OF NIGERIA PLC. 7,862.53 3.50 - 0 0 TRANSCORP HOTELS PLC 46,362.46 6.10 - 0 0 10 790,940 MEDIA/ENTERTAINMENT DAAR COMMUNICATIONS PLC 4,800.00 0.40 - 0 0 0 0 PRINTING/PUBLISHING ACADEMY PRESS PLC. 272.16 0.45 -10.00 2 413,727 LEARN AFRICA PLC 1,026.03 1.33 - 5 89,316 STUDIO PRESS (NIG) PLC. 1,183.82 1.99 - 2 4,800 UNIVERSITY PRESS PLC. 867.13 2.01 -4.29 5 107,776 14 615,619 ROAD TRANSPORTATION ASSOCIATED BUS COMPANY PLC 513.89 0.31 6.90 3 2,761,000

BUSINESS DAY

NEWS YOU CAN TRUST I WEDNESDAY 30 JANUARY 2019

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Opinion

Buhari crosses the rubicon OPEYEMI AGBAJE

have written many times in this column about the fact that President Muhammadu Buhari’s inclinations are not to govern as a civilian democrat but to rule as a military dictator. That inclination was manifest right from the moment he was sworn in as president on May 29, 2015-he did not want to be burdened with a civilian cabinet contrary to the prescriptions of the Nigerian constitution but wanted to rule in conjunction with civil servants and security officials. Indeed, Buhari refused to appoint a cabinet for seven months and was heard to argue that civil servants really did the work and not civilian ministers. Throughout his three-and-a half years in office, the evidence has mounted in favour of the fact that Buhari, rather than the reformed democrat he promised Nigerians he had become, was really an un-regenerated military ruler! His disdain for judicial pronouncements whenever they contradict the wishes of his regime soon became very clear-the government of Buhari has since simply ignored court judgments which ordered several persons

detained by his emerging junta to be freed (Sheik Ibrahim Zakzaky of the Islamic Movement of Nigeria, the Nigerian Shiite Sect whose members were also mass-murdered by the regime’s military; and former National Security Adviser, Colonel Sambo Dasuki have both remained in detention in spite of court orders to the contrary, much like persons detained under the notorious Decree 2 Buhari promulgated as a military dictator. In substance rather than form, General Buhari has, in effect, re-issued Decree 2, and may yet issue additional de facto, if not dejure decrees abrogating or constraining more of citizens’ rights when he gets the second term that he current seeks. Right now, Deji Adeyanju is imprisoned in a jail in Kano for no reason! An accusation was conjured against him, and in spite of a higher court’s grant of bail, the young activist sits still in prison. The Buharian era acts in blatant defiance of democratic norms-no other civilian government in Nigerian political history has appointed virtually all its security chiefs from one part of the country! Right now, the Chiefs of Army and Air force, DG of the Department of State Security; DGs of the National Intelligence Agency and Defence Intelligence Agency; National Security Adviser; Heads of Customs, Immigration and Prisons etc. are all Northern Muslims! When Acting President Yemi Osinbajo appointed an Acting DG of

DSS from the South, Buhari promptly removed him and replaced him with yet another Northern Muslim. It is significant that not even military regimes with the exception of General Buhari’s which had nine or so out of 12 Supreme Military Council members from the North was so unbalanced in its composition! The same pattern has now fully reflected in the judiciary as President Muhammadu Buhari has now forced out the Chief Justice of the Federation (CJN), Justice Walter Nkanu Onnoghen and replaced him with a Sharia Law expert from Bauchi State! With the unconstitutional and undemocratic removal of Justice Onnoghen, Buhari in my view made the final transition from elected civilian president to dictator who is under no constitutional restraint and who can do whatever he wishes. We can all be certain that if Buhari gets his second term, he will rule fully in that second coming as a full-fledged dictator free to execute an agenda that is evidently ethnic, regional, religious and sectarian! It was clear to everyone including the US and UK governments who expressed concern that the unusual efficiency and speed with which the illegal processes by which the CJN was in effect removed on the orders of a junior tribunal, the Code of Conduct Tribunal just three weeks before a presidential election in which the Supreme Court may end up adjudicat-

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With the unconstitutional and undemocratic removal of Justice Onnoghen, Buhari in my view made the final transition from elected civilian president to dictator who is under no constitutional restraint and who can do whatever he wishes

ing is not a mere coincidence but part of the steps towards fixing the outcome of the elections. It was curious but not surprising that Justice Tanko Mohammed, Buhari’s illegitimate choice as CJN’s first task on his first day in office was to announce 250 judges to serve on election tribunals! The precedents we have had in virtually all elections conducted under Buhari especially in Osun, Ekiti and Kogi suggests the outcomes of the 2019 general elections may be a forgone conclusion. But then perhaps, man proposes, God disposes! Unfortunately Nigerian civil society has been completely destabilised since 2014-2015 when civil society consummated and formalised its merger with the All Progressives Congress (APC) and it is no longer possible for most voices who may have risen in opposition to a looming dictatorship to speak out based on conscience and national interest-the regime can depend on a Professor ItseSagay SAN to defend its every atrocity; Femi Falana can be relied on to quickly come on (what everyone now regards as the APC TV) Channels TV and speak from both sides of his mouth (!); the NBA cannot act firmly and with conviction; Professor Wole Soyinka will attack former President Olusegun Obasanjo instead! And General Buhari will have his wayat least for now! opeyemiagbaje@rtcadvisory.com

PMB & corruption fight: Beyond probe, prosecute and jail! FRANKLIN NNAEMEKA NGWU (PHD)

s the lamentations on the way the CJN was suspended from office continue, it is important that PMB and APC appreciate that the outcry is not a support for corruption but on the untidy way it was done and the real intentions of the government. In addition, even if it is agreed that it is a fight against corruption, I am deeply concerned that the present approach of ‘probe, prosecute and possibly jail the offenders’ while important might achieve only limited and unsustainable results. It is mainly the same approach that has been used by all previous governments which unsurprisingly has had little or no impact. The question that should be asked is why corruption seems to be increasing and getting more complex even with all the presumed efforts against it. In our reactive approach to governance, we lack deep and detailed examination of the historical and sociological genesis and growth of corruption in Nigeria, especially how our formal governance and legal systems have been the major sources and causes of corruption.To make any meaningful progress, we need to properly understand how our institutions, organizations and their interactions have helped to create a dominant culture of corruption. In line with the concept of path-dependence, this unfortunately started even before 1897 when the name Nigeria was first suggested and has continued throughout our trajectories and efforts to create a nation state. Institutions can be formal or informal and includes rules and laws, practices, norms and values which provide the procedures that moderate or help to elimi-

nate uncertainties and inherent costs (broadly speaking) in human relations and transactions. They are the structures through which incentives are prescribed in all human engagements- education, social, economic and religious. Through the incentives provided by the institutions, organizations emerge to pursue their different aims (such as winning an election, passing an exam, getting a job) within the standard constraints of economic theory. Organizations include political parties, religious groups, government agencies, social groups and individuals. Economic outcome of a society (in this case, presence or absence of corruption) is therefore determined by (i)the mutual relationship between our peculiar institutions and the organizations that have evolved as a result of the incentive structure provided by our institutions (ii) the feedback process by which we (Nigerians) perceive and react to changes in the opportunity set. Applying the above brief definitions and explanations to Nigeria will enhance our understanding of the reasons for the pervasive corruption in our society. I will clarify with few brief illustrations in line with the concept of path-dependence. For over 400 years from 1455 to 1840s, majority of the ethnic groups that make up Nigeria were subjected to a most inhuman and lamentable experience, the slave trade. Even with the abolishment of the slave trade and its replacement with trade in agriculture and raw materials, the new trade, in line with the concept of path- dependence had all the characteristics of slave trade. It was exploitative, divisive and dominated by dishonest and greedy traders (merchants and middlemen) but interestingly also regulated and supported by the then formal governance system. Before and after the amalgamation of Northern and Southern Nigeria in 1914, the different ethnic groups were governed separately and had limited contact with each other and as a consequence a

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With the above illustration, it can be deduced that our dominant formal institutional incentives over these years have been that of exploitation, greed, dishonesty, division, tribalism and nepotism

culture of mistrust was encouraged and supported by the formal governance system. Both the Northern and Southern protectorates reported directly to London with the then Governor General, Lord Lugard, the only semblance of unity. All the ethnic groups maintained their informal legal system and cultures (norms and values) and used the formal English legal system only in situations where the informal legal system will not suffice. As a child looks up to parents for moral guidance and growth, we looked up to the colonial masters for a formal national value/governance system but what kind did they bequeath us? They bequeathed us formal institutional incentives utilized in achieving their economic interests. Possibly oblivious that their primary interest (economic exploitation of raw materials) deviated from the ones needed for nation building, we adopted and started using those institutional incentives in our formal governance system which expectedly but unfortunately became our national value system.These include dishonesty, use of force and violence, exploitation, abuse of power, greed, divide and rule used for both slave trade and colonialism. Exacerbating our situation is the usage of dual but contradicting and confusing legal systems (the informal, based on our tribal cultures and the formal, based on English common law). The effectiveness of a law (stating the obligation, justifying it and punishing offenders) depends on the extent to which the law is accepted, understood, internalized and complied with. The success or usefulness of a law therefore starts from the way the law is stated or expressed, its believability and amenability with informal norms and values (social norms). As social norms are rules that are not officially stated or enforced by formal legal actions but yet complied with, the efficacy of the formal law to serve as a good deterrent mechanism

immensely improves when it is used to complement social sanctions (informal norms and values). The helpfulness of informal norms and values is due to their alignment with morality which starts at birth and families. In the above explanation of the relationship between informal and formal laws, Nigeria cannot be said to be a good example. While an alien, misunderstood and forced formal legal system (English formal law) was used in formal governance system, the informal legal system (norms and values) moderated our ethnic groups. Not only did we arrogate superiority to the English legal system, we rejected and denigrated our informal legal system (norms and values) in our formal governance systems. With this grave mistake, we voluntarily set our dear nation in a direction of confusion and contradiction resulting in our seemingly unachievable sustainable development and endemic corruption. Recalling that Nigeria is a very plural society lacking a common value consensus but with relative rigidity and clarity of group identification, the ineffectiveness of our adopted formal legal system becomes more apparent. This is very evident with the glaring difference between the contents of the law and the practice of the law. While the contents might state the need for equity, unity, transparency, hard work, merit, the practice starting from the slave trade period to the present is the opposite. With limited integration and consequent distrust among the ethnic groups, anything at the center is perceived and approached with deep ethnic sentiments and lack of responsibility. Dr. Ngwu is a Senior Lecturer in Strategy, Finance and Risk Management, Lagos Business School and a Member, Expert Network, World Economic Forum. E-mail: fngwu@lbs.edu.ng see conclusion online: www.businessday.ng

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